Feb 16 (Reuters) – A look at the day ahead in European and global markets from Wayne Cole.
It’s been a quiet start to the week with holidays in much of Asia – welcome, almost, to the year of the Fire Horse – and the United States.
Japanese data rained on the Nikkei’s parade as GDP badly missed forecasts. The economy grew just 0.2% annualised in the December quarter, when analysts had hoped for a bounce of 1.6% after a contraction in Q3.
GDP was also up just 0.1% year-on-year, a sharp slowdown from 2% in mid-2025. Nominal GDP was a bit better at 3.4% on the year, but all of that was accounted for by rising prices.
Government spending and imports were the biggest drags on growth, which should strengthen PM Takaichi’s case for aggressive fiscal stimulus. Suddenly the talk is of a speedy supplementary budget as opposed to late in the year.
Anyway, the Nikkei could do with a rest having climbed 5% last week. Likewise, Taiwan had risen 5.7% and South Korea more than 8%, as chipmakers benefited from the truly mountainous amounts being splashed out by the AI hyperscalers.
Analysts are worried the tech giants are now in a desperate race to be first with AI (whatever that looks like), without regard to returns.
At least there are no tech majors reporting this week, leaving humble Walmart to steal the show. Walmart expects annual sales to rise between 4.8% and 5.1%, and they need to be at the top of that range to justify a P/E of 47.
The world’s first $1 trillion retailer also has shades of AI in its pricing, particularly in logistics, robotics, digital advertising and online sales. They are hoping AI can better predict what shoppers will want to buy, and not buy, which would be a bonanza for efficient inventory management.
Key developments that could influence markets on Monday:
– Euro zone industrial output
– Participation by ECB President Christine Lagarde and Board Member Piero Cipollone in Eurogroup meeting
– Fed Vice Chair for Supervision Michelle Bowman speaks
(Editing by Sonali Paul)
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