After a subdued start to the week without impetus from US stock markets, which were closed for a holiday, the current corporate reporting season is now the focus of investor interest.

In the current week, around 130 US companies and 70 listed companies from Europe will present their earnings for the fourth quarter of 2022. In addition to earnings season, investors are eagerly awaiting the Bank of Japan's monetary policy decision. Speculation is growing that Japan's central bank is on the verge of a monetary policy turnaround. Meanwhile, the latest data showed that the pandemic has slowed down China's economy in 2022.

Quarterly earnings and Bank of Japan come into focus

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Europe's stock markets started the new week with moderate gains. The EuroStoxx 50 closed Monday at 4,157.00 points (+0.15%). The New York Stock Exchange remained closed yesterday for a holiday. Stock markets in the Asia-Pacific region trended mostly negative on Tuesday. In Tokyo, the Nikkei 225 rose by 1.3%. The focus is on the Bank of Japan's monetary policy decision on Wednesday. In contrast, the Hang Seng Index in Hong Kong fell by 1.2%. On the Chinese mainland, the Shanghai Composite fell by around 0.3%. The focus here was on GDP figures for last year and the fourth quarter.

China's economy slowed by pandemic in 2022

China's GDP grew by 3% year-on-year last year, much slower than the 5.5% targeted by the government. In 2021, the world's second-largest GDP still expanded by 8.4%. In the fourth quarter of last year, however, China's economy did slightly better than expected, expanding by 2.9% quarter-on-quarter. In addition to the Zero Covid strategy with lockdowns and other restrictions, the Chinese economy also suffered from weak domestic demand, high debt and the real estate crisis. With the easing of strict pandemic measures, life now seems to be returning to normal in many metropolises.

IMF warns of increased fragmentation of the world economy

According to a recent report by the International Monetary Fund (IMF), increased fragmentation could cost the world economy up to 7% of global GDP. In particular, the Covid-19 pandemic and the war in Ukraine have also led to a decline in international cooperation as well as disruptions in financial, food and energy supplies, and additional trade restrictions have exacerbated disunity between regions, the IMF argues. The World Economic Forum in Davos also has the motto: Cooperation in a fragmented world.

(C) 2023 Electronic News Publishing, source ENP Newswire