A Short Market Week, Walmart Earnings and Warren Buffett’s Letter

Here’s what to expect in the week ahead:


In observance of Presidents’ Day, financial markets and most banks in the United States will be closed on Monday. The holiday, established in 1885 in recognition of President George Washington, is now generally viewed as a day to celebrate all United States presidents. For most Americans, though, the day has become an occasion to hit the stores for sales over the long weekend. Mathew Brownstein


Finance ministers from the eurozone, meeting in Brussels, are expected on Monday to recommend a replacement for Vítor Constâncio, the vice president of the European Central Bank, whose term expires at the end of May. The only two candidates are Luis de Guindos, the economics minister of Spain, who is the favorite; and Philip Lane, the governor of Ireland’s central bank. The selection of a new vice president is the first in a series of major personnel decisions that could alter the character of the central bank. The culmination will be the choice of a successor to Mario Draghi, the president, whose term expires in October 2019. Jack Ewing


Walmart reports its fourth quarter earnings on Tuesday. Analysts will bee looking for signs that the nation’s largest retailer can continue to build out its e-commerce business without greatly eroding profits. Walmart is also expected to release details on its sales from the holidays, which were strong for many retailers. Michael Corkery


Investors will be focused on British banks as that nation’s largest lenders are scheduled report their fourth-quarter results, including HSBC on Tuesday, Lloyds Banking Group on Wednesday, Barclays on Thursday and Royal Bank of Scotland on Friday.

Several of Europe’s biggest banks have taken large charges in the fourth quarter as they have been hit by changing tax laws, particularly in the United States. Last week, Credit Suisse reported a fourth-quarter loss of 2.13 billion francs, or about $2.3 billion, driven primarily by 2.23 billion francs in income tax expenses as a result of tax changes in the United States. Chad Bray


The Federal Reserve spent much of last year debating whether inflation was rising too slowly. New year, new problem: A federal tax cut took effect in January, the unemployment rate is just 4.1 percent and investors are now worried that inflation might start rising too quickly. That, in turn, could prompt the Fed to accelerate the upward drift of its benchmark interest rate. So far, there’s no sign that the Fed has adjusted its plans. The central bank, as expected, left the benchmark rate unchanged at its first meeting of the year, in late January. It will publish an account of that meeting on Wednesday, providing at least a little more information about its outlook and its plans for the coming year. Binyamin Appelbaum

The European Central Bank will publish on Thursday an account of the discussion that took place last month when its Governing Council met to decide monetary policy. Investors and analysts will dissect the minutes for clues about how fast the central bank will wind down its stimulus to the eurozone economy. Interest in the European Central Bank’s intentions is particularly acute. One of the main things causing turmoil in global stock markets recently is uncertainty about how soon central banks will bring an end to the easy credit that has prevailed for the decade since the financial crisis. Jack Ewing


Germany’s highest administrative court, based in Leipzig, will hear arguments on Thursday — and may issue a ruling — on whether cities should be forced to take stronger action to address auto emissions. That could include bans on diesel cars. An environmental group filed the suit arguing that measures taken so far by Düsseldorf and Stuttgart are inadequate, exposing citizens to nitrogen oxide emissions that regularly exceed legal limits. A ruling against the cities would have far-reaching effects in Germany, where many urban areas suffer from excess pollution that comes mainly from diesels. Jack Ewing


Warren Buffett’s annual letter to Berkshire Hathaway’s shareholders has become one of corporate America’s most combed-over dispatches. For more than 50 years, Mr. Buffett’s letter has not just expounded on the conglomerate’s performance but also dispensed investment advice, folksy wisdom and a few corny jokes. The latest missive arrives on Saturday. Last year, Berkshire Hathaway’s insurance business was hit by hurricanes Harvey, Irma and Maria and an earthquake in Mexico. The company also made another bet on the United States economy with its purchase of a nearly 40 percent stake in Pilot Travel Centers, a truck stop operator. But investors will also be looking for any further discussion of succession after Berkshire Hathaway promoted Gregory Abel and Ajit Jain to oversee the company’s many and varied businesses. Stephen Grocer

Content originally published on https://www.nytimes.com/2018/02/18/business/walmart-warren-buffett.html by THE NEW YORK TIMES