Barclays (LON: BARC) share price has had a strong start of the year as investors reposition for the new year. The stock rose to a high of 173.65p, the highest point since Wednesday 21st. It has surged by more than 29% from the lowest point in 2022.
Bank earnings season
The main catalyst for the Barclays stock price is the outlook of central banks like the Federal Reserve and the Bank of England. Recent economic data suggests that central banks will start pivoting this year. US and UK inflation has started dropping. As we wrote here, wage inflation in the US has started easing recently. It grew by 4.2% in December, down from the previous 5.2%.
In a statement on Monday, Huw Pill, Bank of England’s Chief Economist, warned that the bank was still fighting its inflation battle. He hinted that it has several more rounds of rates this year. Higher rates in the UK are beneficial to Barclays and other banks because they wide net interest margin.
The next key catalyst for the bank will be the upcoming statement by Jerome Powell, the Fed Chair. In his first statement of the year, Powell will provide his outlook of the economy and hints on monetary policy. Analysts believe that he will be hawkish in a bid to lower investor optimism. The Fed hiked rates by 450 basis points in 2022.
Barclays stock will also react to the upcoming bank earnings season that will kick off this week. The season comes at a difficult time for banks with investment banking exposure. On Monday, Goldman Sachs announced that it will slash over 3,000 jobs as deal-making dries. Other banks, including Barclays, could downsize their operations.
The top Wall Street banks that will publish their results this week are Wells Fargo, Goldman Sachs, Citigroup, and JP Morgan. Their results will provide hints about Barclays results. Barclays will publish its full-year results on February 15.
Barclays share price forecast
BARC chart by TradingView
The daily chart shows that the BARC stock price has been in a strong bullish trend in the past few weeks. As it rose, the shares are about to make a golden cross, which happens when the 200-day and 50-day moving averages crossover. The Relative Strength Index (RSI) and Stochastic Oscillator have moved upwards.
Therefore, the stock will likely continue rising as buyers target the next psychological level at 2000p. A drop below the support at 162p will invalidate the bullish view.
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