The Week Ahead

The World Economic Forum begins in Davos, Switzerland on Tuesday. Scheduled to be in attendance are:

Jair Bolsonaro, the new right wing president of Brazil.
George Soros
Bill Gates

There will be no US government contingent. Because of the partial government shutdown, President Trump canceled his own scheduled attendance and that of other US government officials.

Also  UK prime minister Theresa May will also not be attending because of the Brexit dealings. May will present a revised Brexit plan to parliament on Monday. 

Vladimir Putin and Shinzo Abe of Japan are set to meet in Moscow on Monday. They hope to settle a territorial dispute over four small islands.

Russia and Japan divided up the 56 islands of the Kuril chain in the Treaty of Shimoda. The four southernmost islands — Iturup (Etorofu in Japanese), Kunashir (Kunashiri), Shikotan and the Habomai group — went to Japan.

But in 1945 at Yalta, Churchill, Roosevelt and Stalin made a mess of things. They determined that the Soviet Union would be given all the Kuril Islands at the end of the war.

Tokyo has maintained that the southernmost four are part of Japanese territory.

Russian public opinion is vehemently against surrendering an inch of territory.

The European Central Bank’s monetary policymakers meet on Thursday. They are expected to keep interest rates unchanged.

The Bank of Japan concludes its two-day monetary policy meeting on Wednesday. No changes are expected.

Ford, Starbucks, Johnson & Johnson, IBM, Comcast and United Technologies are scheduled to report earnings this week. Ford has already warned that profits would come in at the bottom end of expectations. JetBlue, Southwest, American Airlines and Alaska Air will all post earnings on Thursday.

US Leading Indicators data is scheduled to be released Thursday. The consensus for December's index of leading economic indicators is a decline of 0.1 percent vs a 0.2 percent increase in November.

China will release its flaky and not to be trusted GDP numbers on Monday. The flaky 4th quarter 2018 GDP number is expected to show 6.4 per cent growth  (down from 6.5 per cent).

US equity and bond markets are closed on Monday in observance of Martin Luther King Jr Day.

-RW