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Amid economic gloom and the ongoing conflict in Ukraine, there are signs of a return to normalcy.

The Golden Globes return to its home of Los Angeles this week after boycotts over a lack of diversity led to the event’s cancellation last year. Looking further ahead, world leaders, business leaders and economic thinkers will begin arriving in the Swiss resort of Davos this week for next week’s World Economic Forum.

The next seven days also see the guns firing for the official start of the fourth-quarter earnings season, starting with Wall Street banks and UK traders. This will of course remind us that we are far from a return to normalcy for the global economy — more details below.

For the UK, normality at the moment means widespread industrial action. Emergency workers and driving instructors continue to walk out this week as ballots close for teachers’ unions in England and Wales.

Normality was restored at least in the US Congress with the vote to install Kevin McCarthy as Speaker of the House. Attention can now turn to the economic challenges this year will bring – more on the data announcements coming this week below.

A rocket containing a payload of small satellites sits under the wing of 'Space Girl', a converted Boeing 747, at Newquay's Cornwall Spaceport

A rocket containing a payload of small satellites sits under the wing of ‘Space Girl’, a converted Boeing 747, at the Cornwall Spaceport in Newquay © Tim Hepher/Reuters

Are things looking worse? Yes, if you are in Cornwall. Monday promises to be a historic day for the UK county — at least according to Virgin Orbit — with the first launch of a space satellite from mainland Britain.

Perhaps it could be better described as a bit of classic British eccentricity, as nine satellites will be launched into orbit by a rocket launched from a repurposed Boeing 747, due to take off from Newquay Airport on Monday night. It certainly shows a degree of creativity and should lift British spirits at least a little.

Companies

Who likes interest rate hikes? Banks, that’s who. This will be made clear this week when several of Wall Street’s biggest lenders report fourth-quarter data on Friday.

These companies made money on the Fed tightening by raising rates on loans more than on deposits. Analysts estimate JPMorgan Chase, Bank of America, Citigroup and Wells Fargo will report collective net interest income for the final three months of 2022 of nearly $60 billion, up 30 percent year over year, according to consensus data compiled by Bloomberg . The concern is that this side of revenue collection cannot last and that net interest margins have peaked.

A line graph of net interest income in billions of dollars showing the sharp rise in lending income of major US banks

The other side of rising rates is the problem of high inflation, which brings me to the second topic on the corporate calendar this week, retail sales. Increased checkout prices may seem like a good thing for retailers. Not when inflation reaches double digits, it’s not.

We’ll find out exactly how bad it was over the Christmas period – or indeed whether World Cup viewing stock provided any supply – through a series of trading updates from Britain’s major and online brands this week.

Consumer spending could, of course, be better than expected, as Nekt showed last week. Games Workshop, which reports its first-half numbers on Tuesday, is generating a lot of excitement (and not just among Dungeons and Dragons-obsessed teenagers) about the growth opportunities due to the rise of role-playing games during the pandemic. Investors’ (as well as teenagers’) expectations have risen further on the fantasy game producer’s recent Amazon TV and film deal.

Economic data

A shopper carries a Zara bag on London's Regent Street

A shopper carries a Zara bag on London’s Regent Street. The British Retail Consortium updates its monthly high street sales survey on Tuesday © Hollie Adams/Bloomberg

Expect a range of CPI and other inflation data in the coming days from the US, China, Japan, Australia, Brazil and Mexico.

The British Retail Consortium updates its monthly survey of UK sales on Tuesday, while on Friday the Office for National Statistics publishes the latest monthly estimate of gross domestic product giving a sense of where the country stands in terms of the recession.

Monetary policy comes this week from the Bank of Korea, which is expected to raise its key rate by an additional 25 basis points to 3.50 percent on Friday.

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