Investing.com – Global investors will finally be able to see the impact on the market of President-elect Donald Trump's return to the White House. Trump's inauguration on Monday as the 47th president of the United States is expected to trigger a series of executive orders on issues ranging from taxes to tariffs, just as the fourth-quarter earnings season begins in earnest. Here's your look at what's happening in the markets for next week.
-
Trump's inauguration
Investors are watching closely as Trump prepares to begin his second term in office on Monday after the incoming president indicated he intends to sign a series of executive orders on his first day.
US markets will be closed on Monday for Martin Luther King Jr. Day, so any market repercussions may not be fully felt until Tuesday.
Particular focus will be on tariff-related moves, where leaks, counter-leaks and denials since the election have roiled markets.
Ahead of the inauguration, long-term US bond yields rose on expectations that Trump's proposed tariffs could lead to a rebound in inflation.
-
Profits
Investors hoping for another strong year in stock markets supported by US corporate earnings will get a clearer outlook this week, as a string of companies are set to report fourth-quarter earnings.
Key earnings reports will come from streaming giant Netflix (NASDAQ:), healthcare leader Johnson & Johnson (NYSE:), consumer goods powerhouse Procter & Gamble (NYSE:), and credit card issuer. American Express (New York Stock Exchange:).
Earnings season began last week with major banks reporting higher profits, supported by higher number of trades and strong stock market performance which boosted trading revenues.
Overall, analysts expect companies to report a 10.4% year-on-year increase in fourth-quarter earnings, according to LSEG IBES data as of January 15, cited by Reuters.
-
Davos
Global government and business leaders are scheduled to attend the annual meeting of the World Economic Forum in Davos, Switzerland, starting Monday.
A World Economic Forum poll conducted before the meeting last week showed that armed conflict is the greatest risk to the global economy in 2025, followed by extreme weather.
Trump is scheduled to address the meeting via video link on Wednesday. Ukrainian President Volodymyr Zelensky is also scheduled to attend and will speak on Monday, according to World Economic Forum organizers.
Other global leaders scheduled to attend the Davos meeting include European Central Bank President Christine Lagarde, European Commission President Ursula von der Leyen, British Chancellor Rachel Reeves, and Chinese Vice Premier Deng Xuexiang.
-
Bank of Japan rise?
The Bank of Japan is scheduled to hold its first policy meeting of the year on Thursday and Friday.
In the run-up to the meeting, Bank of Japan policymakers appeared to be bracing markets for a possible rate hike, with both Governor Kazuo Ueda and his deputy Ryozo Himeno saying the decision on whether to raise borrowing costs would be up for debate.
Bank of Japan officials will have a few days to assess the impact of Trump's policies on financial markets before making their decision.
A rate hike would narrow the gap between US and Japanese interest rates, which would strengthen the yen. The yen is hovering near the 160 level against the dollar, prompting the Bank of Japan to intervene in foreign exchange markets to support the currency.
-
Oil prices
Futures rose 1.3% last week while rising 1.7% during the week, as the latest round of US sanctions on Russian energy trading heightened concerns about potential supply disruptions.
Oil has risen by 10% since the beginning of this month, amid concerns about the impact of more Western sanctions on Russian crude.
Energy traders are also weighing the potential ramifications of Trump's return to the White House on Monday. Trump's nominee for Treasury Secretary said he was ready to impose tougher sanctions on Russian oil.
Meanwhile, a blast of Arctic air blanketed much of the United States, bringing temperatures plummeting. It is expected to continue until mid-week, when this is expected to increase demand.
