Week Ahead: Investors Looking for Stability in Egypt
Now that Hosni Mubarek is out global markets will be watching Egypt for signs of renewed economic stability after weeks of political turmoil.
Analysts believe the Egyptian stock market is likely to trade sharply lower when it reopens for trading Sunday. Analysts predict foreign and local investors will jump at the first opportunity to sell Egyptian shares since the market last traded on Jan. 27, two days after the start of mass demonstrations.
In Europe financial officials from the Group of 20 leading economies and representatives of international financial institutions are due to gather next Friday and Saturday for the first high-level meeting under France's yearlong G-20 presidency. The world's economic leaders are expected to discuss a new system to oversee international capital flows, the euro-zone debt crisis, currency policy, financial regulation and a number of other economic problems ailing rich and developing countries.
Meanwhile, quarterly results are due from a handful of bellwether companies, including computer maker Dell Inc. (NASDAQ: DELL), corporate lender CIT Group Inc. (NYSE: CIT) and cable provider Comcast Corp. (NASDAQ: CMSCA)
Dell and CIT are scheduled to report Tuesday and Comcast's figures due on Wednesday. Analysts polled by Thomson Reuters forecast mixed results from the trio, with only Dell expected to see strong top- and bottom-line growth.
Other companies due to report next week include hotelier Marriott International Inc. (NYSE: MAR), teen-apparel retailer Abercrombie & Fitch Co. (NYSE: ANF) and broadcasting and outdoor-ad company CBS Corp. (NYSE: CBS).
President Barack Obama's next budget, due Monday, is expected to propose a spending and revenue plan that sharply cuts the deficit, although spending cuts may not be as deep as many Republicans want. Obama is under pressure to cut the U.S. budget. Last month, the Congressional Budget Office forecast that at current trends, the federal government would rack up a nearly $1.5 trillion deficit by the end of September, when the current fiscal year comes to an end.
Federal Reserve Chairman Ben Bernanke is slated to testify at a Senate panel next week on the implementation of the U.S. financial law that was passed last year. Bernanke is one of the witnesses scheduled to appear in front of the Senate Banking Committee on Thursday to discuss progress on the Dodd-Frank law, which was passed to give the Fed and other regulators new powers to try to prevent a repeat of the financial crisis.
The U.S. government is set to release housing data for January, including housing starts, building permits and home construction. Home construction in the U.S. fell to its lowest level in more than a year in December, while housing starts dropped 4.3%. Building permits jumped in December, though the Commerce Department said changes in state building codes accounted for part of the rise.
January data is also due for the U.S. Department of Labor's Consumer Price Index, which measures the price of a fixed market basket of goods and services purchase by consumers, and the Producer Price Index, which measures the price of goods at the wholesale level. Both indexes reported modest increases in December.
Hungarian Prime Minister Viktor Orban is expected to offer more detail about proposed budget cuts in a speech opening the spring session of parliament Monday, as the government intends to begin revamping its budget this year. All three major credit rating agencies downgraded Hungary to one notch above junk status last year, citing the country's shaky public finances.
Canadian Industry Minister Tony Clement said he hopes to announce next week whether he will review the proposed merger of Toronto Stock Exchange operator TMX Group Inc. and London Stock Exchange Group PLC under the Investment Canada Act. The companies on Wednesday agreed to merge in a deal that values TMX at GBP2 billion.
Italian Prime Minister Silvio Berlusconi is scheduled to meet Fiat SpA (F.MI) Chief Executive Sergio Marchionne on Saturday. The meeting has been called amid uproar in Italy over Marchionne's remarks last week saying it was possible he would merge Fiat with Chrysler Group LLC, of which he is also CEO, and headquarter the combined company in the U.S.