The wait may be over for a formalization of the
130-billion-euro aid package for Greece to avoid a default in
on Saturday that the Greek government has found
the additional cuts to bring spending down to $427 million,
a requirement led by Germany as part of further aid.
Though finance ministers still must meet on the actual agreement
there seems little doubt as Greece has worked to meet demands.
Investors should be cautious as some in the Greek parliament have
publicly acknowledged the need to renegotiate terms after
elections this year.
Of just as much importance to this week's markets is China's
second cut of bank reserve ratio requirements in three months. In
a move that may add an
$63 billion into the financial system, bank reserve ratios will
be decreased by 50 basis points (0.5%) on February 24.
Earnings continue this week and the central banks of Turkey
and Colombia will make rate decisions. Though a formalized aid
package to Greece may take some short-term pressures off the
eurozone crisis, the region's banks still must rollover a
considerable amount of maturing debt during the rest of the first
Shares in the S&P500 were volatile last week falling
heavily on Wednesday only to finish up 0.7% for the week. The
iShares MSCI Emerging Markets (
) was able to outperform the U.S.index and finished up 0.9% on
the week. Markets seem torn between optimism and information that
is less bad out of Europe and an already strong run in equities
on a still weak U.S.economy.
Monday, February 20
The Central Bank of Turkey is due to release its one-week
repurchase rate on Monday but is not expected to change rates
from 5.75 percent. Inflation last year ended well above the
bank's 5.5% target at just over ten percent. A weakening economic
environment in Europe will limit the bank's ability to tighten
policy to bring down inflation, hoping that slower growth will
bring down pricing pressures.
CTRIP.com International (
) reports earnings before the market opens and is expected to
show profits of $0.26 per share, representing a 13.3% decrease
over the same period last year and 21.2% less than the most
recent quarter. The online hotel and airline ticket aggregator
has come under pressure lately with other Chinese internet and
media companies but still trades at 21.1 times trailing
Tuesday, February 21
China Real Estate Information Corp (
) reports earnings before market open and is expected to show a
sharp decrease in income per share. Expectations of between $0.04
and $0.07 are well below last quarter's release of $0.10 and
$0.12 reported for the fourth quarter last year.
Chinese online game developer, Shanda Games Ltd (
) will report fourth quarter earnings after market close and is
expected to show a decrease from last quarter to $0.17 per share.
Shares are down almost half from their 52-week high of $7.64 and
trade at 5.2 times trailing earnings.
Wednesday, February 22
Mexico is expected to show a steep drop in growth of retail
sales in December compared to November's report. November sales
rose 7.5%, the most in more than six years, on domestic demand
and a nationwide push by the government to spur domestic
spending. Sales for December are expected to show a more moderate
growth of 4.2% though the headline risk is to the downside as
consumers react to the higher spending in the previous month.
) is expected to report approximately $0.51 per share after
market close, representing an increase of 41.6% over the same
quarter last year. The Latin American online commerce platform
has benefited from a rise of the middle class throughout the
region but trades at an expensive 59.2 times trailing
Qihoo 360 Technology (
) is engaged in internet and mobile security and other internet
services in China. The company is expected to report earnings of
$0.11 after market close.
Ternium S.A. (
) is expected to report earnings of $0.56 per share before market
open, well above last quarter's report of $0.03 and a gain of
$0.39 per share during the same period last year. The Latin
American steel company generates approximately 57% of its
revenues from the U.S.and 43% from Central and South America.
Shares trade at 8.8 times trailing earnings and pay a 3.5%
Thursday, February 23
Poland retail sales are expected to rebound from the previous
8.6% disappointment in December to around 11% as consumer
confidence continues to support slower export growth. Though the
market is expecting an increase, the headline risk is to a
surprise decrease as unemployment has been increasing lately.
December sales surprised to the downside from 12.6% growth in
Colombian industrial production is expected to show signs of
slowing from last month's pace of 6.6 percent. Expectations are
for a decrease to around 5.5% on tighter monetary policy
decisions by the central bank.
Colombia will also report retail sales for last month and is
expected to show an increase to around 4.0% from last month's
1.3% annualized growth. Despite eight rate increases since the
beginning of 2011, consumer credit continues to grow in excess of
20 percent per year.
E-Commerce China Dangdang Inc (
) is widely expected to show a loss of around $0.17 per share on
Thursday. The online retail company is benefitting from the
government's attempts to spur consumer demand but is not expected
to be profitable over coming quarters.
Tenaris S.A. (
) reports earnings before market open with expectations of $0.66
per share, more than 20 percent over the most recent quarter.
Friday, February 24
The Central Bank of Colombia will announce its overnight
lending rate with many expecting a 25 basis point (0.25%)
increase to 5.25 percent. The bank recently
that it was looking at measures to moderate growth other than
increasing rates. While the series of rate increases have helped
to bring inflation down to target, the peso has appreciated by
7.7 percent this year putting pressure on exporters. While the
market is expecting an increase in rates, the headline risk is to
no change and weakness in the peso.
Grupo Aeroportuario del Sureste S.A. (
) is expected to report earnings of around $0.80 per share on
Friday, below last quarter's $0.88 but slightly higher than the
same period last year. The Mexican airport operator services
locations in the Southeast with passenger and cargo services.
Shares of the $1.9 billion company trade at just below 17 times
trailing earnings and pay a 3.75% dividend yield.