Next week, software companies such as Unity, AppLovin, S&P Global, and Robinhood will release their earnings reports; the US nonfarm payroll report and CPI data will be released in the same week, a rare occurrence; China’s January inflation and money supply data are expected to be released next week.
Following a strong rebound in various risk assets on Friday, the key focus for next week remains on software stocks, silver, cryptocurrencies, and other recently volatile assets, as well as whether the trend of capital flowing into cyclical/value stocks can continue. (Edited by Shi Zhengzhi, CLSA Financial News, February 8)
By contrast, the S&P 500 Software & Services Index plummeted 15% in just over a week, while the Dow Jones Industrial Average, driven by cyclical stocks and NVIDIA, closed above the 50,000-point mark for the first time in history on Friday.
(Dow Jones Daily Chart, Source: TradingView)
Jim Reid, head of macro and thematic research at Deutsche Bank, warned in a report that the ongoing weakness in the tech sector, which still largely drives the broader US stock market, could pose challenges for indices.
Reid wrote: “The market can digest continued rotation for a considerable period, even if it involves significant outperformance in certain sectors, without necessarily showing immediate pressure at the index level. However, the longer and deeper the selloff in leading sectors persists, the harder it becomes for the overall index to withstand the drag.”
Among the companies reporting earnings next week are software firms such as Unity, AppLovin, S&P Global, and Robinhood, which are at the center of recent turbulence. Their performance and management commentary will test whether this round of selloff is justified. As the earnings season gradually winds down, well-known companies such as Coca-Cola and McDonald's will also release their results. Investors will also pay attention to supply chain companies like Cisco and Applied Materials, which provide essential tools for AI giants, for their latest insights into AI demand.
Due to the brief government shutdown experienced by the US earlier this week, next Wednesday and Friday will see the rare phenomenon of the nonfarm payroll report and CPI being released in close proximity.
In addition to providing an update on the state of the US job market, this employment report will also include routine annual data adjustments, potentially trimming up to one million jobs from previously reported figures. Market expectations for January nonfarm payroll growth currently range between 60,000 and 80,000 jobs. A figure below this range would likely spark discussions about interest rate cuts.
In Asia, China’s January inflation and money supply data are expected to be released next week. Chinese investors will also celebrate the Lunar New Year holiday after the market closes next Friday, with trading set to resume on February 24.
Another risk point next week lies in Japan's general election for the House of Representatives this Sunday. The investment market will closely monitor the impact of the election results on Japan’s fiscal and monetary policies. Particularly against the backdrop of high debt levels, investors will focus on politicians' verbal promises regarding 'where to raise funds.'
The situation in the Middle East is moving toward stabilization. Following indirect talks between U.S. and Iranian representatives in Muscat, the capital of Oman, this Friday, U.S. President Trump stated that “the talks went well” and announced another round of discussions to be held next week. Iranian officials also described the talks as “a good start,” but have yet to confirm subsequent schedules.
Finally, as a hot topic in U.S. public discourse, members of Congress will be able to review the unredacted version of the “Epstein documents” starting next Monday, followed by U.S. Attorney General Pam Bondi testifying at a congressional hearing on Wednesday. It is reported that only the three million documents already made public are available for review, with over three million additional documents not yet disclosed excluded from this process.
Overview of Key Financial Events for Next Week (Beijing Time)
Monday (February 9): Eurozone February Sentix Investor Confidence Index
Tuesday (February 10): U.S. December retail sales data, U.S. December import price index, China January M2 money supply annual rate
Wednesday (February 11): China January CPI, U.S. January non-farm payroll report
Thursday (February 12): UK Q4 preliminary GDP
Friday (February 13): U.S. January CPI
Other: The People's Bank of China is expected to release January money supply data midweek.
