Finance Market Wrap: The continued impact of Omicron brings further volatility to markets this week

Market Wrap: The continued impact of Omicron brings further volatility to markets this week

Market Wrap
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Another week of elevated volatility on mixed earnings reports from the influential US tech sector and hawkish tones from the European Central Bank and the Bank of England.

The US benchmark stock index, the S&P 500, traded in a 4 per cent range before closing 1.55 per cent higher.

The Australian stockmarket, the ASX200, closed 1.89 per cent higher at 7120, benefitting from a positive lead from Wall Street and after the RBA maintained its dovish forward guidance.

Here are the top five things to watch in markets this week:

1. US inflation data for January

Another hot inflation print is expected in the US this week.

Inflation in January is expected to rise by 0.5 per cent, taking the annual rate of inflation to 7.3 per cent, a new four-decade high.

2. US Q4 2021 earnings results continue

On Friday, a bumper earnings report from Amazon helped revive the rebound after Facebook parent Meta plunged more than 25 per cent after its earnings report raising questions about future growth.

This week will see earnings reports from companies including Pfizer, AstraZeneca, Walt Disney, Twitter, and Coca-Cola.

Analysts expect Pfizer to report revenues of $24.2 billion, and adjusted EPS is expected to more than double year on year to $87c from $42c per share.

3. Australian business confidence data

In December, the NAB business confidence index fell to -12, its lowest level since July 2020, reflecting the arrival of Omicron.

The continued impact of Omicron should see the number remain at depressed levels.

4. Australian 1H2022 earnings season picks up the pace

The Australian 1H2022 earnings season kicked off last week, and this week the action hots up with reports from companies including the Commonwealth Bank of Australia (CBA), Computershare (CPU), AGL Energy (AGL) and ASX Limited (ASX).

The arrival of Delta and then Omicron brings earnings risk this season for companies with a domestic focus and are likely to see the volatility episode of January extend further into February.

5. Has Bitcoin bottomed?

In recent months, Bitcoin has traded like a high-octane version of the Nasdaq.

Buoyed by a bumper earning reports from Amazon on Friday, Bitcoin closed above $40,000 for the first time in two weeks.

Traders will look for the gains to extend towards the next resistance level at $48,000.

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All trading carries risk. The figures stated are as of January  24, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.