In the Global Week Ahead, inflation data from the United States, Europe, and Japan will inform stock and bond markets.

Key PMI numbers are due for Mainland China.

Policymakers gather with the World Trade Organization (WTO) in Abu Dhabi, to debate how to restart the stuttering economic growth engine that is global trade.

Meanwhile, Ukraine marks the second anniversary of Russia's invasion.

Next are Reuters’ five world market themes, reordered for equity traders —

(1) On Monday, the World Trade Organization (WTO) starts a high-level meeting in Abu Dhabi.

Rising protectionism and geopolitical conflict have cast a pall over world commerce, which last year grew just 0.2% — its weakest rate in five decades outside global recessions.

What can the World Trade Organization, which starts its minister-level meeting in Abu Dhabi on Monday, do about it?

Very little, most observers conclude.

The body is hampered by disputes among member countries and above all by domestic politics that have turned sour on the free trade, which the WTO was set up to promote.

Ahead of November U.S. elections, there is little chance of Washington removing its roadblock on new appointments to the WTO's top appeals bench — meaning its trade dispute arbitration body will remain idle.

Meanwhile, prospects for deals in major sectors, such as farming and fisheries remain dim — meaning trade cannot be counted on to drive the global economy for the foreseeable future.

(2) Late Monday, Japan’s inflation figures are out. China PMI’s are out Friday.

Policymakers in China and Japan are facing a tough battle to improve the dour growth outlook in their economies.

Inflation figures for Japan are due on their Monday — and expectations that consumer prices have cooled again in January might give the Bank of Japan (BOJ) one less reason to exit negative rates this year.

The central bank faces a recessionary backdrop and sluggish consumer spending, but maintaining ultra-easy policy would mean more pain for the yen.

Over in China, authorities have grown increasingly desperate to shore up a fragile economic recovery after delivering the biggest ever reduction in the benchmark mortgage rate and ramping up regulatory pressure to revive an ailing stock market.

Friday's PMI data will provide more clarity on how effective Beijing's support measures have been. In the meantime, though, investors remain unimpressed.

(3) On Thursday, the U.S. Personal Consumption Expenditure (PCE) data is out.

U.S. inflation is back in the spotlight on Thursday, with the PCE price index set to give investors another look at an economy that has been stronger than many had expected.

Recent data such as consumer prices, producer prices and employment show the world's largest economy continues to hum along despite months of elevated interest rates.

One upshot has been an increasingly cautious Fed pushing back on expectations of an imminent rate cut.

Bond yields have rebounded and the U.S. dollar has edged higher.

Economists polled by Reuters expect a +0.3% increase for January after +0.2% in the previous month.

A stronger-than-expected PCE number could further whittle away at market rate cut bets.

(4) On Friday, March 1st, the Euro Area flash composite PMI numbers are out.

The European Central Bank (ECB) must be pleased, surely?

Upcoming flash February numbers on March 1st should show euro area inflation, which soared to double-digits in 2022, is moving back towards its +2% target.

The reading slipped to +2.8% in January from +2.9% in December and is cooling quickly with growth anemic and retreating energy prices.

The composite reading will follow national data from Germany, France and Spain — all out before the ECB meeting on March 7th. ECB vice-president Luis de Guindos says time and more data are needed before policymakers can say comfortably that record-high rates have done their job.

Wage growth meanwhile has slowed but remains above levels consistent with +2% inflation.

So, it is not quite happy days as rate setters navigate that tricky ground between keeping rates high enough to contain inflation while timing a first rate cut just right.

(5) Ukraine will remain in the spotlight.

Saturday marks the second anniversary of Russia's invasion of Ukraine — a conflict that has shaken and shaped not only the country itself but global politics, commodity markets and economies like no other in recent history.

Prices for energy and many commodities are back below pre-war levels, though gold — an inflation hedge — is above February 2022 prices.

Outgunned, outnumbered and facing growing concerns over the prospect of international aid, Ukraine is coming under increasing pressure.

The International Monetary Fund (IMF) warns that "timely support" for Ukraine from the U.S. and other international donors is needed to ensure the country's fiscal viability.

Meanwhile Russia, already severed from global financial system following swathes of sanctions, is facing fresh curbs from Washington, Britain and others following the death of opposition leader Alexei Navalny and the war entering its third year.

Zacks #1 Rank (STRONG BUY) Stocks

(1) Coinbase Global (COIN Quick QuoteCOIN - Free Report) : This is a $170 stock with a $38.9B market cap. It is found in the Finance-Securities and Exchanges industry. I see a Zacks Value score of F, a Zacks Growth score of D and a Zacks Momentum score of A.
 

Image Source: Zacks Investment Research

Coinbase is the largest U.S. cryptocurrency exchange, trading some 50 different digital assets.

(2) Royal Caribbean Cruises (RCL Quick QuoteRCL - Free Report) : This is a $122 stock with a $29.4B market cap. It is found in the Leisure and Recreation Services industry. I see a Zacks Value score of A, a Zacks Growth score of A and a Zacks Momentum score of F.

Image Source: Zacks Investment Research

Based in Miami and incorporated in 1985, Royal Caribbean Cruises is a cruise company.

It owns and operates three global brands — Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises.

Additionally, it has a 50% investment in a joint venture with TUI AG, which operates the brand TUI Cruises.

The company’s cruise brands primarily serve the contemporary, premium and deluxe segments of the cruise vacation industry, which also includes the budget and luxury segments. These brands operate 64 ships. The ships operate on a selection of diverse itineraries worldwide that include roughly 1,000 destinations on all seven continents.

The company reports revenues under the following segments — Passenger ticket revenues (68.8% of total revenues in 2023) and Onboard and other revenues (31.2%).

Across the company’s five brands, nearly 5.5 million guests sailed in 2022. By the end of 2022, 64 out of 75 ships returned to operations, representing more than 85% of its worldwide capacity. The company’s bookings improved sequentially by 2022-end. As of Dec 31, 2023, the company had nearly $5.3 billion in customer deposits.

In the third quarter of 2022, the company unveiled a three-year financial performance initiative — the Trifecta Program — thereby articulating longer-term financial objectives. The program emphasizes financial coordinates, including Adjusted EBITDA per APCD, Adjusted EPS and ROIC.

Under this program, the company expects to achieve a triple-digit adjusted EBITDA per APCD, exceeding the earlier record adjusted EBITDA per APCD of $87 in 2019.

The company also expects to achieve double-digit adjusted earnings per share, exceeding the earlier record adjusted earnings per share of $9.54 in 2019.

(3) Sumitomo (SSUMY Quick QuoteSSUMY - Free Report) : This is a $24 Japanese stock with a $28.9B market cap. It is found in the Conglomerates – Diversified Operations industry. I see a Zacks Value score of A, a Zacks Growth score of C and a Zacks Momentum score of F.

Sumitomo Corp. is engaged in multifaceted business activities. It operates as an integrated trading company worldwide.

The company sells a variety of domestic products and services, conducts import, export and trilateral business transactions.

The company also provides domestic and international business investment, and participates in numerous other activities in various industrial sectors around the world.

Its business includes metal products, transportation & construction systems, infrastructure, media, network & lifestyle retail, mineral resources, energy, chemical & electronics, general products & real estate, new industry development & cross-function and corporate group.

Sumitomo is headquartered in Tokyo, Japan.

Key Global Macro

With a new month under way, Friday, March 1st has a big dump of U.S. data.

On Monday, U.S. New Home Sales for JAN are out. I see a higher 0.675M is the consensus, after a prior 0.664M print.

Japan’s national Consumer Price Index (CPI) is out for JAN. The broad CPI reading was at +2.6% y/y. The core (ex-food and energy) CPI was at +3.7% y/y.

On Tuesday, the U.S. Case-Shiller Home Price Indices (HPI) are out for DEC. The prior reading was +5.4% y/y.

U.S. Durable Goods orders for JAN are out. The prior reading was 0%. The consensus is for -4.5% y/y.

On Wednesday, a 2nd reading of Q4 U.S. GDP should keep a +3.3% y/y mark.

On Thursday, U.S. core PCE for Q4-23 is out for JAN. I see a +2.9% y/y prior print.

On Friday, Mainland China’s NBS manufacturing PMI for FEB is out. JAN was at 49.2.

The Euro Area HCOB manufacturing PMI For FEB is also out. I see a 46.1 consensus, after a 47.1 prior print.

Euro Area core HICP inflation for FEB is out too. That should be +3.0% y/y, following a +3.3% y/y prior print.

U. of Michigan consumer sentiment is out for FEB. The prior JAN print was 79.6.

The ISM manufacturing PMI for FEB is out. I see a 49.1 prior print. New orders were 52.5.

Conclusion

Here are Zacks Research Director Sheraz Mian’s four key earnings points. These were written on Feb. 20th, 2024.

He highlights strong results from the Retail sector.

(1) Total Q4 earnings for the 402 S&P500 members that have reported results are up +4.9% from the same period last year on +3.4% higher revenues.

78.6% are beating EPS estimates. 64.4% are beating revenue estimates.

(2) For the Retail sector, we now have Q4 results for 84.1% of the sector’s market capitalization in the index.

Total earnings for these Retail companies are up +43.1% from the same period last year on +8.4% higher revenues.

89.5% are beating EPS estimates. 63.2% are beating revenue estimates.

(3) The Q4 EPS beats percentage for these Retail sector companies is notably above what we had seen from the group in other recent periods.

But the revenue beats percentage is tracking below other recent quarters.

(4) Looking at Q4 as a whole, combining the actual results that have come out with estimates for the still-to-come companies, total S&P500 index earnings are currently expected to be up +5.5% from the year-earlier level on +3.2% higher revenues.

This would follow the +3.8% earnings growth in 2023 Q3 on +2.0% higher revenues.

One must conclude: A still strong U.S. consumer is keeping pressure on retail prices.

Happy trading and investing.

John Blank
Zacks Chief Equity Strategist and Economist