This week is full of commemorations.
It begins with the anniversary of the Maastricht Treaty, which was signed 30 years ago on Monday by the 12 member states of what had been the European Community. It established the EU and laid the foundations for monetary union, fueled concerns among those opposed to further political union, and likely sowed the seeds of Brexit. Expect some (further) soul-searching this week.
Another kind of political change took place in Iran this week in 1979, when the Islamic Revolution overthrew the Shah’s monarchy and ushered in rule by the clergy. The country’s leaders will no doubt look back on its importance, but the more pressing challenge for Tehran is economic recovery in the face of US sanctions, although progress is being made.
There has been much debate about the UK government’s claims about the strength of the pandemic recovery. Much attention will be paid to the country’s quarterly and monthly forecasts, which were published on Friday.
Elsewhere there will be data on US inflation and Germany’s manufacturing and trade figures. Interest rate hikes are expected in Mexico and Russia, and the EU will update its economic forecasts.
We are well into earnings season. This week it is the turn of consumer goods manufacturers, drug manufacturers and car manufacturers.
Unilever’s Full-year results on Thursday will be closely watched following the unpopular bid to buy GlaxoSmithKline’s consumer health division and news that the activist fund Trian Partners – co-founded by Nelson Peltz – has acquired a stake. As Hellmann’s mayonnaise maker plans a reorganization that will take ice cream out of the rest of its food business, investors will want to know if it will sell one or both of its food divisions and how it plans to improve performance in the rest of its portfolio — such as and whether the company’s chief executive, chief financial officer and chairman can all survive the current GSK debacle.
Results of Coca Cola and PepsiCo will reveal whether a resurgence in Covid-19 cases around the world lowered soft drink demand in the December quarter. New lockdown measures in Chinese restaurant chains ravaged McDonald’s and Starbucks, showed their revenues, while supply chain costs, including delays from Canada, continued to climb. Still, analysts expect Coca-Cola and PepsiCo to report stronger revenues compared to the same quarter in 2020.
Japanese automakers Nissan and Honda will announce their P&Ls this week. But investors will look to see if Toyota, the world’s largest car seller in 2021, may shake off the impact of chip shortages in the coming months after announcing in January that a supply problem would force it to cut production for February – this Lex note explains the consequences . In terms of output, this means Toyota is unlikely to meet its production target of 9 million vehicles for the fiscal year through March.