There's been no shortage of catalysts for the markets over the last few weeks, with the Federal Reserve and Donald Trump in particular keeping things interesting, and now we can add corporate earnings season to the mix as the Dow continues to struggle to break the psychological 20,000 barrier.
Earnings season has possibly come just at the right time as the Trump trade appears to have been exhausted in the absence of any details on his stimulus plans. The Dow has come extremely close to breaking above 20,000 on a number of occasions but it would appear just the idea of ambitious spending and tax cutting plans is not quite enough to take us to the next level. Perfect time then for earnings season, an opportunity for corporates to convince us that these levels are built on strong foundations, not just the prospect of fiscal stimulus.
Earnings season gets underway today with a number of banks reporting on the fourth quarter. Among these are JP Morgan, Wells Fargo and Bank of America which should offer great insight into how the financials are expected to perform in the coming weeks.
We'll also get some economic data from the US today with retail sales for December being released. This continues to be a massively important month for retailers and could tell us a lot about just how much consumer spending habits are actually improving now that wage growth is improving, albeit gradually. The consumer is a hugely important part of the US economy and good numbers here will be extremely welcome as the new administration enters the White House and investors brace for what could be a wild ride.
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