The week ahead is crowded with potential catalysts for the investment markets. Dozens of companies report their quarterly financial results, the United Kingdom begins a new era outside the European Union, and President Trump lays out his priorities to Congress and the American voter in his State of the Union address.
Any one of these events could demand the attention of long-term investors.
However, American markets may take their initial queues from China in the week ahead.
Chinese markets reopen after the Lunar New Year and after the growing threat of the coronavirus. When the main stock index in Hong Kong restarted trading after the holiday, it fell more than 5% in two days. The Chinese markets were ordered to remain closed for two additional days when the government extended the holiday in its effort to address the coronavirus outbreak.
According to the World Health Organization the number of confirmed infections has jumped more than tenfold since the Chinese stock markets last traded. Travelers, public health officials and others are on edge as countries across the globe work to contain its spread.
But, so far, American markets have weathered worries over the disease. Yes, volatility has picked up, but U.S. investors seem to be comfortable with the risk the virus poses for the global economy. Certain companies, like Exxon, Freeport-McMoRan and even Starbucks have experienced stock price declines attributed to uncertainty over how the virus could impact the demand for oil, copper and coffee. However, confidence in American investment markets has withstood the initial worries.
As the Chinese people return to work after their holiday and the Chinese investment markets reopen, that American confidence may be tested again.
