Equity markets are on pause after last week’s records

European markets

There is a lack of direction for European indices this Monday, following the path set by the US equity market on Friday and Asia–Pacific (APAC) performance overnight. Last week, several indices around the world set new record highs.

The Dallas Fed manufacturing index

On the macroeconomic front in the US, we are starting the week fairly slowly with the publication of US new home sales for the month of January and the Dallas Fed manufacturing index. It will ramp up later in the week with US durable goods orders, conference board consumer confidence, personal income and spending, and ISM manufacturing Purchasing Managers' Index (PMI). Two indicators will be of particular interest for the market. On Wednesday, the 2nd estimate of gross domestic produc (GDP) for the fourth quarter was released. Economists anticipate the US economy to have expanded by 3.3%.

The personal consumption expenditures

It will be followed on Thursday by the all-important core personal consumption expenditures (PCE) price index for the month of January. Expectations are for a 0.4% rise in month-over-month (MoM), up from the 0.2% recorded the previous month. Year on year, core personal consumption expenditures (PCE) price index growth should slow to 2.8% from 2.9% in December.

ABRDN

Elsewhere on the equity market, quite a few reports will punctuate the week here in the UK. On Tuesday, ABRDN will publish its earnings for the full year. The market also awaits full-year reports for Reckitt Benckiser, Taylor Wimpey, Aston Martin Lagonda on Wednesday, and Ocado and Haleon on Thursday.

Zoom Video Communications

Zoom Video Communications is due to report tonight after the US market closes. The street anticipates earnings of $1.14 per share, which would be a 6% decline on the same quarter last year. Revenue is expected to rise by 1% year-over-year (YoY) to $1.13 billion. With the COVID-19 pandemic crisis now behind us, Zoom has to re-evaluate its strategy. It now bets on generative AI to retain and hopefully expand its customer base. Last May, it invested in AI start-up Anthropic and will integrate its AI model into its contact centre platform. Later last year, it launched Zoom Workforce Management, a tool aiming to optimise and monitor performance. It also counts on Zoom AI Companion, which it says will improve productivity and improve teams’ effectiveness. The race for AI is only starting. Investors would like to hear more about how Zoom intends to compete with Microsoft's Teams.

American companies quarterly earnings

Later this week, a few American companies are set to report their quarterly earnings. On Tuesday,eBay, American Electric Power, followed on Wednesday bySalesforce, Snowflake, and Best Buy, Hewlett Packard Enterprise, Broadcom, on Thursday.

Alcoa

Earlier this Monday, US aluminium producer Alcoa offered to buy its Australian joint venture partner Alumina, valuing the company at $2.2 billion. Alumina CEO Michael Ferraro has already said he intends to recommend shareholders vote in favour of the proposal.