The Week Ahead: Rolls-Royce, BAE Systems, HSBC, Glencore, Alibaba earnings + key flash PMI, inflation and GDP data

Equity markets have seen a wide dispersion in performance as a range of sub-sectors were caught up in AI fear-driven selling over the last week or so. Everything from enterprise software and data analytics to insurance brokers and wealth managers have seen indiscriminate selling as investors evaluate a batch of new AI tools that could disrupt their industries.

Looking ahead, earnings season continues but at a slower pace with the headliners including Walmart, Alibaba, BAE Systems, Rolls-Royce, Rio Tinto, Glencore, Diageo and HSBC. The economic front we are looking at UK inflation and employment data to support the case for the Bank of England to cut rates next month. The week finishes with a slew of PMI data and the US PCE inflation and Q4 GDP reports.

Here’s the key events to watch over the next week.

Monday, 16 February

Wall Street will be closed in observance of the Presidents Day holiday, whilst the economic calendar is light with just Eurozone industrial production of note.Various Asian markets will be closed or finish trading early for Lunar New Year’s Eve. 

The India AI Impact Summit begins and runs all week – watch for commentary around the AI trade from the likes of Nvidia CEO Jensen Huang and Alphabet CEO Sundar Pichai. Miner BHP reports earnings.

Tuesday, 17 February

Lunar New Year begins, marking the Year of the Horse. Markets will be closed in mainland China, Hong Kong, Taiwan, Singapore, South Korea, Malaysia, the Philippines and Vietnam, with bourses scheduled largely to remain shut for the rest of the week.

In Europe the focus will be on the latest UK unemployment figures and earnings data. The last report showed unemployment rate at a 4-year high of 5.1%, while wage growth cooled to 4.5%. As noted following the soft Q4 GDP print, the key test for when the Bank of England next cuts rates is whether we see continued slowdown in wages and hiring over the next couple of prints. This data point will therefore be closely watched by traders for an indication of whether the BoE is odds-on to cut in March or whether it suggests a delay to the April meeting. It may also provide a signal about how much more the BoE needs to cut rates in this cycle.

Fed Governor Michael Barr and San Francisco Fed President Mary Daly will be speaking on the labour market, AI and the economy, which may offer some colour around the way the Fed views the employment situation given the recent data points we have seen. The Empire State manufacturing index is the major economic data point to watch before the US session gets underway after the long weekend.

One of the software companies caught up in the recent AI-driven selloff, Palo Alto Networks, reports earnings. Antofagasta is the next to report in a busy week for mining stocks.

Wednesday, 18 February

It’s a big day for earnings updates from FTSE 100 companies with BAE Systems, Glencore and HSBC FY results and Diageo interim results on deck. 

For Diageo, investors will be looking and hoping for signs of a turnaround strategy from recently appointed CEO Dave Lewis, the former Tesco boss with a reputation for taking drastic action. He may need to with the stock halving in value over the last four years as consumers dialled back drinking habits post-pandemic while there are signs of structural shifts globally with fewer people drinking alcohol.

For HSBC investors the focus is on the progress of the grand restructuring and cost-cutting plan under CEO Georges Elhedery, which promises to deliver $1.5bn in annual savings to shareholders, as well the growth trajectory of its increasingly important wealth division where it expects double-digit percentage growth over the medium term. In Hong Kong it posted 61% fee income growth from its wealth management division last quarter. We’re also looking for commentary around risks related to private credit and commercial real estate, as well as an update on the combination of commercial banking and global banking and markets businesses, one of the more consequential changes under the restructuring. 

BAE Systems has been one of the top performers over the last year but has pulled back from its January highs as geopolitical tensions have receded somewhat. Investors will be looking at whether there’s scope to again raise the sales and profit outlook on the back of fresh contract wins.

In the US, we’ll be watching Carvana, an e-commerce platform for buying and selling used cars that’s been part of the AI-related selloff in the software space.

On the economic data side, the UK CPI inflation report is the next bit of the jigsaw as far as the Bank of England is concerned. This is important since the nine-strong Monetary Policy Committee remains split with four hawks consistently warning on the upside risks to the inflation outlook as a reason not to cut. The last month’s report ticked up to 3.4% from 3.2%, largely due to one-off factors with the headline rate seen declining to 2% by April.

Elsewhere, the Reserve Bank of New Zealand is expected to leave interest rates on hold at 2.25% and bring forward their first projected hike to December. Minutes from the last Federal Reserve meeting will be released, which will enable investors to scrutinise the FOMC’s decision to leave rates on hold last month. US durable goods orders and industrial production figures are on deck as well. In Europe, German inflation data and the ZEW economic sentiment index are due up.

Thursday, 19 February

Rolls-Royce and LSEG report full-year results, while Walmart is the highlight in the US alongside Alibaba, which may catalyse fresh volatility around AI stocks. On Tuesday (10 Feb) Alibaba released its latest AI model to power robots, the latest sign that Chinese companies are challenging US dominance in the space. Walmart is all about consumer resilience with latest retail sales figures for the US weak, as well as its continued strength in e-commerce which has seen its market cap hit $1 trillion for the first time.

Highlights for Rolls-Royce will be around aerospace demand for its engines as well as growing demand for data centre power generation. LSEG reports after the shares were caught in the downdraft from the Anthropic Claude Opus 4.6 rollout which hit a broad range of enterprise software and data analytics stocks –watch for commentary around AI as well as any potential signs that activist investor Elliott Management is pressing for change.

Rio Tinto reports earnings that will be closely watched following the failed merger with Glencore. Shares hit an all-time following the breakdown in the deal but investors will want to know what the strategy looks like without Glencore in the mix.

Australia’s employment change numbers, US weekly unemployment claims data, the Philly Fed manufacturing index and US pending home sales are among the main economic releases of the day.

Friday, 20 February

PMI reports will set the risk tone for the day. Flash PMI data will provide closely watched updates on economic conditions around the world. For UK investors the main focus is on whether domestic activity shows further signs of improvement after January’s encouraging report indicated post-Budget relief, while the US PMI suggested a slightly reduced rate of expansion compared to last year. Ahead of the PMIs we look at the UK retail sales report, which had a surprise uptick in December that added to signs of a post-Budget resurgence in confidence after the Budget that we have also noted in the PMI survey data.

The December US personal income and spending report offer the latest insight on consumption and the core PCE index — the Fed’s preferred inflation gauge, which last showed a 2.8% annual rise. This comes alongside the advance estimate of fourth quarter GDP. The report, delayed by the government shutdown last year, is expected to show growth slowing to 2.7% annualised from 4.4% in Q3. The Atlanta Fed’s nowcast model, usually an outlier on the upside, has been revised lower in recent weeks, currently estimating a 3.7% advance. The NY Fed’s model points to 2.7%.

The US Supreme Court reconvenes for a public non-argument session, with markets watching closely for a potential ruling on President Donald Trump’s tariffs. Today is the deadline for Warner Bros. Discovery shareholders to accept Paramount Skydance’s hostile offer with Netflix poised.