2022 is an important voting year. Some were expected, some were not. Some have more legitimacy than others. There will be a lot of analysis on this latter point this week.
The most important of these is the installation process, not the selection. The Chinese Communist Party kicks off his first party congress on Sunday in his five years. The outlook is not good, according to FT chief economics editor Martin Wolfe. It’s a “tragic mistake”.
The immediate concern of the Xi Jinping administration is the collapse of the housing market, which, in addition to its zero-coronavirus policy and difficult economic conditions, has seen China’s strong growth stall, lagging behind the rest of Asia for the first time since the early 1990s. This year, according to the World Bank. Increasing consumer spending in China is the obvious way to revive growth. For Xi and his senior lieutenants, the problem with this solution is that doing so would mean giving up some of their political power.
Before that comes another question of tension for Beijing. Monday is Taiwan’s National Day holiday, and soft-spoken President Tsai Ing-wen will deliver a speech.
China claims Taiwan as its territory. The Scottish National Party, led by Nicola Sturgeon, no longer wants to be seen as the territory of the British government. A day later, the SNP’s risky plans for another referendum on the issue will be heard by the UK’s Supreme Court.
The UK government has refused to authorize another vote. Her two-day Supreme Court hearing is set to end on Wednesday.
Even if the court agreed with the UK government, it would not necessarily end the SNP’s second referendum attempt, but would almost certainly undermine Sturgeon’s goal of holding a vote in October 2023. .
Talking about second chances, the voting debate aside, this Friday London’s landmark Battersea Power Station will reopen in a new form as a retail, leisure and residential building.
This feels like good news in turbulent times. The building has four chimneys, one of which he can climb by a glass elevator (for a fee). And the £9 billion renovation, completed after many previous attempts have failed, is so cool that Apple is occupying several floors for its UK employees. Whatever the case, the restoration of this iconic 1930s building is revitalizing the local housing market.
The US is closed for Columbus Day, a quiet start to the week for markets. However, make up for it as the week progresses.
Inflation is a theme led by US and Chinese data (isn’t it going to be?). The Fed will also release the minutes of its September meeting, which will provide some indication of his Fed’s upcoming intentions to tighten monetary policy to contain the rising cost of living.
The IMF and World Bank Annual Meetings also begin on Monday in Washington and continue throughout the week.
We’ll see mixed results this week, but a few sectors will stand out as the reporting season progresses.
A booming job market is expected to help recruiting firms PageGroup and Robert Walters secure higher quarterly net fees. But the latest in their trading will be watched for signs of slowing demand as inflation and recession fears mount.
The week concludes with third-quarter earnings reports from Wall Street banks, which could heighten fears of a US recession. Citi, JPMorgan Chase, Wells Fargo and Morgan Stanley all report on Friday, with Bank of America and Goldman Sachs following next week. Analysts expect the six institutions to collectively set aside more than $4 billion to cover potential losses from bad debt.
On the positive side, third-quarter earnings for JP Morgan, BofA, Citi and Wells are expected to rise about 4% year-on-year on higher net interest income as the Fed raises rates, according to the US bank. A correspondent points out. Goldman Sachs and Morgan Stanley, which get a large share of their profits from investment banks, are likely to report lower earnings given lower trading activity.
Read the full calendar for the week ahead here.