Trump travels to Davos forum, Netflix results
Daniel Garrahan previews the big stories the FT is watching in the week ahead, including the US president joining the global elite for the World Economic Forum, the European Central Bank's first monetary policy meeting of the year and Netflix's fourth-quarter earnings report.
Filmed by Rod Fitzgerald. Produced by Filip Fortuna.
Hello, and welcome to The Week Ahead from the Financial Times in London. Here are some of the big stories we'll be watching this week. The global elite gathers in Davos for the World Economic Forum.
Will there be faster growth at Procter & Gamble after veteran activist investor Nelson Peltz was given a seat on the board? The European Central Bank holds its first monetary policy meeting of the year. And the video streaming service, Netflix, reports fourth-quarter earnings.
First, to the Swiss Alps, where elite figures from the political and corporate world will gather for the annual World Economic Forum in Davos. The International Monetary Fund is expected to start the week with upbeat global economic forecasts. But that positive economic picture contrasts with the more difficult geopolitical outlook, after tensions between the US and North Korea rose in 2017.
Though perhaps the biggest talking points among delegates at Davos will be the attendance of US President Donald Trump. During his election campaign, Mr Trump attacked his opponent, Hillary Clinton, as a globalist, and vowed to be a champion for ordinary Americans beaten back by an unfair global economic system. So how will that message go down with the Davos elite? Our economics editor, and a Davos veteran, Chris Giles reports.
Donald Trump is going to be there. The global elite are going to be there. And I think they will be looking for the Donald Trump that wants to be like them. A little bit like President Xi last year, came out with a globalising, unifying message. That's what they'd like to see.
Maybe he'll give them that. If he wants adulation, that's what he'll do. We can never predict what he's going to do. If he wants to effectively punch them in the face, and say America first, USA, USA, USA, then he will get a quite a stony reaction. So it's very, very up in the air, exactly what sort of message he brings, and then what sort of response he'll get.
And now to Proctor & Gamble, which is reporting earnings on Tuesday. P&G eventually agreed, late last year, to give the veteran activist investor Nelson Peltz a seat on its board. The decision ended one of the most expensive and viciously fought proxy battles in corporate America. But how will this move affect the outlook for the consumer goods company, whose brands include Tide detergents and Pampers. Our US consumer correspondent, Anna Nicolaou, reports.
Since that vote last month, analysts have already raised their expectations for Procter & Gamble, on the expectation that bringing this person in to shake things up will invigorate faster growth at P&G. P&G, like a lot of its peers, has had pretty slow sales growth in the past few years, about 1% or 2%. So analysts will be looking towards the next few quarters to see will that be any faster, what other changes might Nelson Peltz bring to the structure of P&G.
And now to Frankfurt, where the European Central Bank holds its monetary policy meeting on Thursday. Ahead of the meeting, the euro has reacted sharply to suggestions that the bank could end its bond-buying quantitative easing programme earlier than expected.
The bank is buying 30 billion euros worth of new bonds a month at the moment. And is expected to keep that plan until September. But ECB watchers increasingly suspect it'll end QE in the autumn, because of the rapid improvements in the eurozone economic fortunes over the past year. Here's our Frankfurt bureau chief Claire Jones.
Rather than saying the eurozone's economy has experienced a recovery, policymakers are now saying the region is undergoing a period of economic expansion. That more optimistic message has convinced some people that they will end the bond purchases under the quantitative easing programme a little sooner than people expected.
Now the European Central Bank has committed to keep on buying bonds until September. The question now is, will they keep on buying beyond that date? Don't expect Mario Draghi to say much that's definitive this week. However, people should be on the lookout for subtle shifts in the ECB president's tone.
And finally, to Netflix. The video streaming company shares rose by more than 50% last year, as its subscribers exceeded 100 million for the first time. But to sustain that momentum through 2018, it will need to show that growth can be profitable too.
When Netflix reports its fourth-quarter earnings on Monday it will face a new test of its pricing power. It increased prices in many parts of the world in October. So investors will be watching closely for any sign of customer churn. Our US tech correspondent, Tim Bradshaw, has more.
Analysts are looking for around 54 million US subscribers and 61 million internationally. But the fourth quarter saw a new season of its hit sci-fi series, Stranger Things, and its first true blockbuster movie Bright, starring Will Smith, which despite mixed reviews, Nielsen estimates it was watched by 11 million people over its opening weekend, which is as big as the most recent Fast and Furious movie.
So there's plenty more to come. Netflix is investing $8 billion in content this year. And so, the real question is, can it keep those hits coming to keep their subscriber growth going, and keep people paying those high prices.
And that's what the week ahead looks like from the Financial Times in London. See you again next time.