This Week Preview (2/20~2/23)

The market will probably stay in tepid water next week as traders try to find the direction after recent bounce. Crude price continues to rise.

News during the Weekend

On Monday, Japanese Nikkei +1.9% to 22,142 amid exports grew 12.2% in January from a year earlier, marking their 14th consecutive monthly increase. The increase was led by brisk shipments of China-bound hybrid cars and electronics parts.

GS pointed out during the weekend:

  • "Federal fiscal policy is entering uncharted territory. In the past, as the economy strengthens and the debt burden increases, Congress has responded by raising taxes and cutting spending. This time around, the opposite has occurred." 
  • Rising interest rate and debt level will lead to a meaningful increase in interest expense. On their current projections, federal interest expense will rise to 2.3% of GDP by 2021, and 3.5% by 2027. 

It is hard to imagine what will happen when another recession hits global economy.

China has threatened retaliation after the Trump administration received a green light to impose steep tariffs on aluminum and steel imports on national security grounds.
"If the final decision from the U.S. hurts China's interests, we will definitely take necessary measures to protect our rights," said Wang Hejun, a senior official at China's Commerce Ministry.

Saudi Arabia, is exploring the use of nuclear energy for domestic energy consumption as part of its transition away from an oil-based system.
"We are looking at a number of countries that have nuclear technology for peaceful purposes... so that we can save the oil and export it in order to generate revenue," Foreign Minister Adel Al-Jubeir said at the Munich Security Conference.

Black Panther posts the 5th best U.S. opening of all time, beating Iron Man, Batman and Superman. The Disney film earned an estimated $192M from Friday through Sunday, and is on pace to score $218M including Presidents Day.

A federal judge in Delaware has overturned a jury’s verdict requiring Gilead Sciences (GILD) to pay a record $2.54B because its HCV drugs Sovaldi and Harvoni infringed a patent held by rival Merck & Co (MRK). Merck said it planned to appeal and believed the judge’s ruling did not reflect the facts of the case. It is a big win for GILD. The verdict had been the largest ever in a U.S. patent case.

Earnings Next Week

Tuesday

  • pre-market:   BHP, CHH, DPZ, DUK, ECL, HD, IHG, MGM, NBL, SIX, WMT
  • post-market:  AWK, CBI, DVN, HALO, LC, LZB, RCII, RIG

Wednesday

  • pre-market:   AAP, GRMN, LNG, SLCA, WWW
  • post-market:  AAOI, ANIK, CAKE, CAR, GPOR, JACK, NE, O, P, ROKU, SAM, TRN, WEN, WLL

Thursday

  • pre-market:   APA, CHK, NEM, SAFM, SDLP, SFM, TPX, W
  • post-market:  BMRN, CENX, FSLR, HLF, HPE, HPQ, INTU, NOG, OLED, RDFN, TAHO, WING, ZIXI

Friday

  • pre-market:   CNK, COG, RBS

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