It was an upbeat month for stock markets in January, with US bourses closing out the 31-day period with decent gains.
February seems to have started in the same vein, but market sentiment could shift slightly this month.
Historically, February is a mediocre time for stock markets – but there will be some key events this month that should drive sentiment.
In my previous column, I spoke about upcoming US Federal Reserve action – and this remains the key driver of sentiment and price action in markets.
As widely expected, the Federal Open Market Committee left rates unchanged at its meeting last month, and signalled that it needed to see inflation cool further before considering any rate cuts – effectively negating any chance that the central bank would lower borrowing costs at its meeting in March.
The CME FedWatch tool currently shows there is an 84.5 per cent chance the Fed will hold back from cutting interest rates in March, up from 31.9 per cent a month ago.
The Fed has remained cautious as the US data docket continues to mature and provide key updates.
Last Friday, the US non-farm payrolls report for January showed the economy added 353,000 new jobs, well above expectations of 187,000.
Average hourly earnings, a metric to gauge inflation, also came in slightly higher at 4.5 per cent, compared with expectations of 4.1 per cent. The overall US unemployment rate was unchanged at 3.7 per cent.
The strong jobs report will have the Fed on guard, as a hotter-than-expected labour market tends to add to upward price pressures – more people employed means more consumer spending, which ultimately yields higher inflation.
The US Consumer Price Index report, due out on February 13, will be our next big clue.
Current expectations have annual CPI coming in at between 3.2 per cent and 3.6 per cent, with a previous reading of 3.4 per cent.
We would need to see a substantial fall below 3.4 per cent to change the Fed’s view.
During last week’s FOMC meeting, Fed chairman Jerome Powell noted future cuts would not be appropriate until “we have greater confidence that inflation is moving towards the central bank’s 2 per cent target”.
While I am seeing true inflation in the US probably at its lowest level in a year, I would need to see more easing of prices in housing and transportation for the Fed to start cutting rates.
Numerous Fed officials are expected to also speak this week – and their comments will be closely parsed.
Data for retail sales, another key metric of inflation, will be released on February 15 at 5.30pm UAE time. Shortly after, at 6.15pm, US industrial and manufacturing production figures will also be released.
I expect currencies to trade weaker against the US dollar over the next two weeks – EUR/USD looks good to test at 1.0650 levels this month, while GBP/USD should make a run for 1.23 levels in the weeks ahead.
Gold will also come under pressure this month, with a move towards $2,000 expected, where strong support should kick in.
Finally, fourth-quarter earnings season is set to continue this month.
Last week, we saw Facebook and Amazon smash earnings expectations with very impressive forward guidance.
We would need to see this positive trend to continue for the remaining reporting companies to keep optimism high in US equity markets.
On Wednesday, Walt Disney will report its earnings and we await Coca-Cola, Shopify and Airbnb's results next week.
Retailers will take over the spotlight in the second half of the month, with companies such as Walmart, Home Depot, Target and Lowe’s Home Improvement all announcing earnings.
The darling of the markets, chip maker Nvidia, will announce its fourth-quarter results on February 21.
All things considered, perhaps it’s a bit premature to execute longer-term positions in the current climate.
If US data remains uneven and lacks conviction by the Fed, we could see a mini correction, which may be the point for investors to enter.
In the short term, however, the uncertainty and fourth-quarter earnings will provide more than enough opportunities for day traders.
Gaurav Kashyap is a risk manager at Equiti Securities Currencies Brokers. The views and opinions expressed in this article are those of the author and do not reflect the views of Equiti Securities Currencies Brokers
Roll of honour 2019-2020
Dubai Rugby Sevens
Winners: Dubai Hurricanes
Runners up: Bahrain
West Asia Premiership
Winners: Bahrain
Runners up: UAE Premiership
UAE Premiership
}Winners: Dubai Exiles
Runners up: Dubai Hurricanes
UAE Division One
Winners: Abu Dhabi Saracens
Runners up: Dubai Hurricanes II
UAE Division Two
Winners: Barrelhouse
Runners up: RAK Rugby
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
Scores
Rajasthan Royals 160-8 (20 ov)
Kolkata Knight Riders 163-3 (18.5 ov)
More from Neighbourhood Watch:
Company%20profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3EHakbah%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2018%0D%3Cbr%3E%3Cstrong%3EFounder%3A%20%3C%2Fstrong%3ENaif%20AbuSaida%0D%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3ESaudi%20Arabia%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%0D%3Cbr%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%20%3C%2Fstrong%3E22%20%0D%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%20%3C%2Fstrong%3E%24200%2C000%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3Epre-Series%20A%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EGlobal%20Ventures%20and%20Aditum%20Investment%20Management%0D%3Cbr%3E%3Cbr%3E%3C%2Fp%3E%0A
Disposing of non-recycleable masks
Use your ‘black bag’ bin at home
Do not put them in a recycling bin
Take them home with you if there is no litter bin
- No need to bag the mask
Dubai World Cup factbox
Most wins by a trainer: Godolphin’s Saeed bin Suroor(9)
Most wins by a jockey: Jerry Bailey(4)
Most wins by an owner: Godolphin(9)
Most wins by a horse: Godolphin’s Thunder Snow(2)
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Global state-owned investor ranking by size
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UAE
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Norway
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Canada
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The biog
Favourite books: 'Ruth Bader Ginsburg: A Life' by Jane D. Mathews and ‘The Moment of Lift’ by Melinda Gates
Favourite travel destination: Greece, a blend of ancient history and captivating nature. It always has given me a sense of joy, endless possibilities, positive energy and wonderful people that make you feel at home.
Favourite pastime: travelling and experiencing different cultures across the globe.
Favourite quote: “In the future, there will be no female leaders. There will just be leaders” - Sheryl Sandberg, COO of Facebook.
Favourite Movie: Mona Lisa Smile
Favourite Author: Kahlil Gibran
Favourite Artist: Meryl Streep
UAE currency: the story behind the money in your pockets
The years Ramadan fell in May
Astroworld
Travis Scott
Grand Hustle/Epic/Cactus Jack
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
FIRST TEST SCORES
England 458
South Africa 361 & 119 (36.4 overs)
England won by 211 runs and lead series 1-0
Player of the match: Moeen Ali (England)
Company Fact Box
Company name/date started: Abwaab Technologies / September 2019
Founders: Hamdi Tabbaa, co-founder and CEO. Hussein Alsarabi, co-founder and CTO
Based: Amman, Jordan
Sector: Education Technology
Size (employees/revenue): Total team size: 65. Full-time employees: 25. Revenue undisclosed
Stage: early-stage startup
Investors: Adam Tech Ventures, Endure Capital, Equitrust, the World Bank-backed Innovative Startups SMEs Fund, a London investment fund, a number of former and current executives from Uber and Netflix, among others.
UAE currency: the story behind the money in your pockets
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
About RuPay
A homegrown card payment scheme launched by the National Payments Corporation of India and backed by the Reserve Bank of India, the country’s central bank
RuPay process payments between banks and merchants for purchases made with credit or debit cards
It has grown rapidly in India and competes with global payment network firms like MasterCard and Visa.
In India, it can be used at ATMs, for online payments and variations of the card can be used to pay for bus, metro charges, road toll payments
The name blends two words rupee and payment
Some advantages of the network include lower processing fees and transaction costs
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
MATCH INFO
Uefa Champions League semi-final, second leg result:
Ajax 2-3 Tottenham
Tottenham advance on away goals rule after tie ends 3-3 on aggregate
Final: June 1, Madrid
Red Sparrow
Dir: Francis Lawrence
Starring: Jennifer Lawrence, Joel Egerton, Charlotte Rampling, Jeremy Irons
Three stars
The biog
Name: Shamsa Hassan Safar
Nationality: Emirati
Education: Degree in emergency medical services at Higher Colleges of Technology
Favourite book: Between two hearts- Arabic novels
Favourite music: Mohammed Abdu and modern Arabic songs
Favourite way to spend time off: Family visits and spending time with friends
UAE currency: the story behind the money in your pockets
THE SIXTH SENSE
Starring: Bruce Willis, Toni Collette, Hayley Joel Osment
Director: M. Night Shyamalan
Rating: 5/5
