CEO's Weekly Outlook - Earnings for now, Carney for the future

US company earnings reports this week are likely to draw market attention as some of the world’s largest companies face shareholders. Investors will seek information about the state of play in AI ecosystems, the health or otherwise of the US consumer, and the impact of tariffs on prices, among other issues.

The focus on individual companies may provide a welcome distraction from the macro structural shift in global affairs flagged last week by the Canadian Prime minister, Mark Carney. PM Carney, who has also previously served as the Governor of both the Bank of Canada and the Bank of England, called on the middle powers of the world to unite at a time of major power assertion.

Carney’s call is compelling. He points out that the current changes in the world are a “rupture, not a transition”. That the time of a rules-based world order, always illusory, is now officially rescinded. He counsels against mourning the change “nostalgia is not a strategy” and warns; “The middle powers must act together because if we’re not at the table, we’re on the menu.”

Further; “In a world of great power rivalry, the countries in between have a choice: compete with each other for favour or to combine to create a third path with impact……we shouldn't allow the rise of hard power to blind us to the fact that the power of legitimacy, integrity and rules will remain strong — if we choose to wield them together”.

A strongly expressed, succinct view of the key strategic imperative of our time is a rarity, yet Mr Carney has laid bare the future for all to see.

What does this mean for investors?

In the short term, probably very little will change. The earnings reports due this week will draw us all back into the major themes and momentum of global shares right now. However the support for gold and silver points to ongoing flows towards alternatives to the US share and bond markets. Recent weakness in the US dollar suggests the safe haven status of US dollar investments may be waning.

It's possible that structural change is coming and it may arrive in a Hemmingway inspired style – “in two ways. Gradually, then suddenly”. A high potential outcome is a diminishing bias to US investment markets generally. This means a lower US dollar, higher interest rates on US bonds, and investment flows towards alternative opportunities. The recent outperformance of shares in Hong Kong and Tokyo could be a sign that these flows have already begun.

Indicators this week: $USD/JPY (USDJPY.FX)$, $EUR/USD (EURUSD.FX)$, watching for signs of investment flows away from the US. Gold for risk-off sentiment. $Bitcoin (BTC.CC)$ for risk-on sentiment. $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ – a red flag at 4.30%

On the radar: AU Inflation (Weds), US Federal Reserve meeting and interest rate decision (Thurs night/Fri morning).

Notable company reports this week:

US $Boeing (BA.US)$ , $Starbucks (SBUX.US)$ , $AT&T (T.US)$ , $Microsoft (MSFT.US)$ , $Meta Platforms (META.US)$ , $Tesla (TSLA.US)$ , $IBM Corp (IBM.US)$ , $MasterCard (MA.US)$ , $Apple (AAPL.US)$ , $Visa (V.US)$ and $Exxon Mobil (XOM.US)$ (see US earnings calendars for details)

Australia $Boss Energy Ltd (BOE.AU)$, $Genesis Minerals Ltd (GMD.AU)$, $Independence Gold Corp (IGO.CA)$, $Liontown Ltd (LTR.AU)$

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