What is going on in this Global Week Ahead?

War in the Middle East is driving up energy prices sharply and that puts central banks, scarred by 2022's inflation surge, in a sticky spot.

Traders, keen to hear policymakers' take, get an opportunity with central banks from the United States to Brazil and Europe to Japan meeting in the coming days.

Next are Reuters' five world market themes, re-ordered for equity traders—
 

(1) Hopes for a Short Iran War Are Dwindling

Hopes of a quick resolution to the war seem to be dwindling.

U.S. President Donald Trump has declared the war will be over when he says it's over.

But tankers are on fire in the Gulf, there's damage to oil loading and transport facilities across the Middle East and Iran's new Supreme Leader, Mojtaba Khamenei, is calling for the Strait of Hormuz to remain closed.

So, traders are starting to accept that even if there's a ceasefire soon, it could be some time before oil, natural gas, fertilizer and other petrochemicals' flows return to normal.

In the meantime, oil prices are see-sawing either side of $100 a barrel, natural gas prices have soared and investors have ripped up assumptions about inflation and interest rates for this year.

It's a bad time to be a forecaster.
 

(2) Is the FOMC Still in a Rate-Cutting Mode? Doubtful

February's surprisingly weak U.S. jobs report supports the case for further rate cuts that Trump has long urged.

Yet, the Middle East conflict suddenly complicates the picture and the Federal Reserve, which concludes its two-day meeting on Wednesday, will be pressed on the outlook.

The Fed is expected to hold rates steady for a second consecutive meeting, after easing rates last year to shore up the labor market.

Fed funds futures indicate investors have tempered expectations for rate cuts this year, as surging oil prices compound concerns about inflation rates being already above the Fed's target.

That could potentially set the Fed up for a fresh clash with Trump in the months ahead.

In Canada, which also holds a central bank meeting on Wednesday, traders anticipate a 25-basis-point rate hike by year-end.
 

(3) On Thursday. After the FOMC Meets: The ECB, the SNB, and the BoE Meet

It's a big day for Europe on Thursday, with euro area, Swiss and UK central banks meeting.

Surging oil prices put Europe — dependent on energy imports — in a tough spot. The memories of 2022, when an initial inflation surge was deemed transitory, run deep.

Markets now price in rate hikes later this year from the European Central Bank and the Swiss National Bank, while rate cuts from the Bank of ‌England have been rapidly priced out.

ECB Chief Christine Lagarde, who for months stressed the ECB is in a “good place,” will likely be probed on just how she sees that position now.

The BoE has less room for maneuver. Just weeks ago, a March cut was widely anticipated. Given relatively sticky inflation, facing fresh upward pressure, that move is off the table.
 

(4) The Reserve Bank of Australia (RBA) and the Bank of Japan (BoJ) Meet, Too

The Reserve Bank of Australia (RBA) and the Bank of Japan (BoJ) are the only two in the G10 group in hiking mode.

Questions on the Middle East war and inflation are key for investors, especially in Japan, which relies heavily on the region for nearly all of its oil supplies.

For the RBA, the outlook is a little clearer. Markets price in an over 70% chance for a 25-bps hike on Tuesday, and a growing number of economists anticipate a move following an inflation warning from a senior official.

The picture is complicated for the BoJ.

Expectations for its next rate increase have been thrown into disarray, as a prolonged spike in energy prices could deliver a double whammy of low growth and high inflation to the import-reliant economy.
 

(5) Then, Consider What Emerging Market Central Bankers Will Do?

The interest rate dial has shifted for many emerging markets from cutting to hiking — but not for all.

Brazil's policy makers, set to publish their rate decision on Wednesday, have long been expected to kick off an easing cycle after keeping rates at a 20-year high of 15% since July.

But the oil price spike triggered by the Iran war prompted analysts to revise forecasts: Some now expect a smaller 25 bps cut instead of 50 bps, others predict easing could be postponed altogether as policymakers reconsider inflation pressures.

Turkey's central bank has just halted its rate cut push, while policy makers in Poland have pondered whether their rate cut delivered earlier in March could be the last one for some time.
 

Zacks #1 Rank (STRONG BUY) Stocks

I picked 3 top Zacks #1 (STRONG BUY) stocks.

All are major “non-U.S.” companies.

(1) Eni (E Quick QuoteE - Free Report) : This is a $50 a share stock, with a market cap of $84.8B. It is found in Zacks Oil and Gas-Integrated International industry. The stock holds a Zacks Value score of A, a Zacks Growth score of C, and a Zacks Momentum score of D. 

F12M P/E: 13.0.
 

Image Source: Zacks Investment Research

Eni SpA, based in Rome, Italy, is among the leading integrated energy players in the world. 

• The upstream operations include the exploitation and production of oil and natural gas resources. 
• Through midstream activities Eni transport and store hydrocarbons. 
• The company is also engaged in refining hydrocarbons and distributing the end products in 71 nations. Apart from providing natural gas, the company also generates and sells electricity. 

The company operates primarily through three business segments – Exploration & Production (E&P), Gas & Power and Refining & Marketing and Chemicals.

Eni’s Exploration & Production segment is responsible for almost 91% of total segmental adjusted profit in 2024. Through this segment, the company exploits and extracts oil and natural gas in 43 nations. The company’s upstream operations also include businesses related to LNG. This backed the company to produce 1,707 thousand barrels of oil equivalent per day (MBoe/d) in 2024, increasing year over year from 1,655 MBoe/d. The total production volumes comprise 45.9% liquid.

As of Dec 31, 2024, the company’s net proved reserves were reported at 6.5 BBoe, increasing from the 2023-end level of 6.4 BBoe.

Eni’s Global Gas & LNG Portfolio segment generated 8% of total segmental adjusted profit. Through this business unit, the company engages in distributing and marketing natural gas and liquefied natural gas in the wholesale market.

Eni’s Enilive, Refining and Chemicals segment is involved in refining and marketing of petroleum products at retail and wholesale markets. Importantly, the company is strongly focused in upgrading and expanding refining plants. Thus, the company has been successfully producing refined petroleum products of premium quality.

The company’s Plenitude & Power business segment was responsible for generating 8% of adjusted profits in 2024. Through this segment, the company is responsible for businesses associated to retail marketing of gas and power.

(2) Mitsubishi Electric (MIELY Quick QuoteMIELY - Free Report) : This is a $69 a share stock, with a market cap of $72.6B. It is found in the Zacks Miscellaneous Products industry. The stock holds a Zacks Value score of D, a Zacks Growth score of C, and a Zacks Momentum score of D.

F12M P/E: 31.0.

Mitsubishi Electric is Japanese multi-national electronics (appliances & consumer electronics) and electrical equipment manufacturing company.

It is headquartered in Tokyo, Japan.

The company was established in 1921 as a spin-off from the electrical machinery manufacturing division of Mitsubishi Shipbuilding (Mitsubishi Heavy Industries) at the Kobe Shipyard.

A member of the Mitsubishi Group, Mitsubishi Electric produces elevators and escalators, high-end home appliances, air conditioning, factory automation systems, train systems, electric motors, pumps, semiconductors, digital signage, and satellites.

(3) Societe Generale Group (SCGLY Quick QuoteSCGLY - Free Report) : This is a $15 a share stock, with a market cap of $56.9B. It is found in the Zacks Foreign Bank industry. The stock holds a Zacks Value score of D, a Zacks Growth score of F, and a Zacks Momentum score of D.
 

Image Source: Zacks Investment Research

Societe Generale Group is the sixth largest bank in the euro zone. 

Its business mix is structured around three core businesses: Retail Banking, Asset Management and Private Banking, Corporate and Investment Banking.

The Group is implementing a sustainable growth policy based on the selective development of its products and services, a client-focused culture of innovation in its different markets, and sustained organic growth coupled with acquisitions.
 

Key Global Macro

This is a long week of events. Central banks dominate the schedule.

On Sunday, we got a number of Mainland China macro indicators.

Among them are Mainland China’s retail sales update for FEB, which came in 30 basis points higher than consensus for a +2.5% y/y rise, following a prior print of +0.9% y/y.

On Monday, the Reserve Bank of Australia (RBA) set its policy rate. A policy rate hike to 4,1% from 3.85% is what to expect. There will be a presser.

On Tuesday, U.S. pending home sales for FEB come out. The prior month’s print was weak at -0.8% m/m.

U.S. ADP employment change, over the last 4 weeks, comes out. I see a tepid +15.5K number was the prior rolling average.

On Wednesday, the U.S. FOMC likely keeps its 3.75% policy rate intact. The most impactful news will come from the new “dot plot” Summary of Economic Projections.

The Bank of Canada (BoC) likely keeps its policy rate firm at 2.25% too.

The Bank of Japan (BoJ) is at a 0.75% policy rate. They also set monetary policy.

On Thursday, the Swiss National Bank (SNB) likely keeps its policy rate at 0.0%.

The European Central Bank (ECB) likely keeps its 2.25% policy rate. Note that it is identical to Canada’s, at the moment.

The People’s Bank of China (PBoC) also sets its monetary policy. They show a 3.0% loan policy rate, at the moment. No change expected here, once again.

On Friday, the latest U.S. Baker Hughes oil rig counts come out. These are going to important, going forward. This one won’t be.

On Saturday, Fed Chair Powell gives a weekend speech.
 

Conclusion

On March 6th, Zacks Research Director Sheraz Mian supplied traders a final earnings season scorecard.

A Forward Look: The Q1-26 Earnings Big Picture

For Q1-26 as a whole? Total S&P500 earnings are expected to increase by +11.4% from the same period last year. on +8.5% higher revenues.

Zacks S&P500 earnings estimates for the current period (Q1-26) have largely been stable, with a modest, though steady uptick in recent weeks.

This overall earnings picture — on a calendar-year basis — shows double-digit earnings growth expected in 2025 and 2026.

A quick comment on ongoing market volatility in response to developments in the Middle East:

Please keep in mind that for these almost upbeat Q1-26 earnings expectations to come true, we need energy prices to return to where they were a few days ago, as an extended period of spiking oil prices has material negative implications for households as well as businesses.

A Backward Look: The Q4-25 Earnings Season Scorecard

We are in that part of the reporting cycle when the preceding earnings season (Q4-25 in this case) has not yet fully ended, even as the coming earnings season (Q1-26) has begun.

Through Friday, March 6th, we have seen Q4 results from 493 S& 500 members, or 98.6% of the index’s total membership.

Total earnings for these companies are up +14.1% from the same period last year, on +9.1% higher revenues.

75.3% beat EPS estimates. 72.6% beat revenue estimates.

My finishing thoughts…

Sheraz Mian is right. The chaos of war surely ruined those standing estimates — in Zacks latest earnings scorecard. Perhaps by less than most observers think. 

It will take time for the full macro effects to fully set in. That is the “Aircraft Carrier” effect. Just remind yourself that this macro momentum move goes both ways.

The global economy, the U.S. economy, and S&P500 earnings will also struggle to regain any lost ground too.

Enjoy this week’s trading and investing!

John Blank, PhD.
Zacks Chief Equity Strategist and Economist