Market Pulse - Feb 3rd 2025
Two free workshops, Macroeconomic Events, Corporate Earnings and much more
As we navigate the week of February 3 to February 9, 2025, several pivotal macroeconomic events and corporate earnings reports are on the horizon. These developments hold significant implications for the intricate balance between financial performance, social responsibility, and environmental sustainability—a triad central to eco-economics
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Free workshops that I am running:
Trading workshop: On Sunday Feb 16th, I am running an online workshop, in association with the Business & Investment Club (Stanmore), where we will discuss how to use the investment research and trading signals to double your account, every year. Club members have priority, but there could be a few spaces left. Please register here.
In climate Workshop on Eco-economics: On Tuesday Feb 18th, I’ll be running a lunch time workshop on Eco-economics (yes, the framework in my book, and the one that powers this newsletter), in association with ‘In Climate’, a large European climate change advocacy and solution group. This is ideal for small businesses, planning to improve profitability, and for early career professionals. In Climate members have priority, but since this is a large workshop, there could be a few spaces left. Please register here.
Upcoming Macroeconomic Events
U.S. Employment Data Release (February 7): The Bureau of Labor Statistics is set to publish the Employment Situation report for January 2025. Projections indicate an addition of approximately 165,000 nonfarm payrolls, with the unemployment rate anticipated to remain steady at 4.1%. This data will offer insights into labor market health and broader economic trajectories.
Central Bank Interest Rate Decisions:
Bank of England (February 6): The Bank of England is poised to announce its latest interest rate decision. Any adjustments will have profound implications for economic growth and inflation within the UK.
Reserve Bank of Australia (February 4): The RBA will convene to assess recent economic indicators, including retail sales data, to inform its monetary policy stance.
Photo by Dustin Humes on Unsplash
Corporate Earnings Releases
Technology Sector:
Alphabet Inc. (February 4): The parent company of Google is expected to report a 29% increase in earnings per share and a 12% rise in revenue for Q4 2024.
Amazon.com Inc. (February 6): Anticipated to showcase a 49% surge in profits, reflecting its expansive market influence.
Biotechnology and Pharmaceuticals:
Pfizer Inc. (February 4): Analysts will closely examine Pfizer's quarterly earnings for insights into its pharmaceutical innovations and market performance.
Amgen Inc. (February 5): Amgen's earnings report will shed light on its biopharmaceutical developments and financial health.
Energy Sector:
ExxonMobil and Chevron: These oil giants are bracing for potential volatility stemming from recent U.S. energy policies and newly imposed tariffs on Canada and Mexico, which could influence global oil prices and market stability.
Impact of Recent U.S. Trade Tariffs
President Donald Trump has announced new tariffs on Canada, Mexico, and China, potentially igniting a North American trade war. The tariffs, which range from 10% on Canadian energy and Chinese goods to 25% on other Canadian and Mexican goods, will take effect on February 4. These measures are anticipated to disrupt various industries, including automotive, consumer goods, and energy. Major companies like Amazon, Ford, and Mondelez are expected to address mitigation strategies in their upcoming reports. While larger corporations may adapt by shifting production or logistics, smaller companies with limited global operations could face severe production delays. Consumer advocate groups have raised concerns about potential price increases on everyday goods. Businesses like Church & Dwight are focusing on local manufacturing to combat the tariffs' effects, while major retailers like Walmart and Target may struggle to maintain low prices amidst rising supply chain costs. Industry associations urge exploring alternative policies to alleviate price pressures on American consumers.
Summary of India's 2025 Union Budget
On February 1, Finance Minister Nirmala Sitharaman presented the Union Budget for 2025-26. Key highlights include:
Income Tax Reforms: The budget proposes revised tax rates, with income up to ₹12 lakh now exempt from income tax under the new tax regime.
Capital Expenditure: India's capital expenditure is set to rise to ₹11.21 lakh crore, up from ₹11.11 lakh crore in the previous fiscal year, signaling a continued focus on infrastructure development.
Focus Areas: The budget emphasizes sectors such as agriculture, industry, and exports, aiming to bolster economic growth and job creation.
While the budget introduces measures to boost consumption and investment, some analysts express concerns over the lack of significant reforms needed to accelerate economic growth to 8%. The emphasis on short-term economic relief, such as tax cuts for the middle class, may not address deeper structural issues hindering long-term growth.
Eco-Economic Considerations
The developments outlined above underscore the complex interplay between financial performance, social responsibility, and environmental stewardship:
Environmental Impact: The energy sector's response to new tariffs and policies will have implications for environmental sustainability, particularly concerning fossil fuel consumption and greenhouse gas emissions.
Social Responsibility: Employment data and corporate earnings in sectors like biotechnology and pharmaceuticals highlight the role of businesses in contributing to public health and social well-being.
Economic Sustainability: Interest rate decisions by central banks aim to balance economic growth with inflation control, reflecting efforts to maintain long-term financial stability.
As we move forward, it is imperative to monitor how these factors influence the global economic landscape and to consider strategies that harmonize financial objectives with social and environmental responsibilities. If you haven’t booked your strategy review call, you can do so, here. I look forward to speaking with most of you and wish you happy trading/ investing.