Chinese stocks are currently seeing their highest level of selling since 2008 on Monday following a crackdown on margin lending by Chinese regulators that punished a dozen brokerage firms including the three largest firms in the country.
U.S. equity markets are closed on Monday in observance of Martin Luther King Jr.
This week investors will be paying close attention to a decision that will be reached on Thursday by the European Central Bank (ECB) to provide some additional monetary stimulus in the form of quantitative easing (QE) across the 19 member euro area to minimize the risk of deflation and help generate more economic growth.
In December consumer prices dropped more than expected across the 19 countries using the euro as currency, moving into negative territory for the first time since October 2009 during the height of the global financial crisis.
Eurostat reported on January 7th that annual inflation declined -0.2 percent in December, missing the consensus estimate of a +0.1 increase.
Another important event this week that could impact investor sentiment includes a World Economic Outlook Update scheduled for release early on Tuesday by the International Monetary Fund (IMF) which comes after a decision last week by the World Bank to cut its global growth forecast once again for 2015.
The World Bank cut its 2015 global forecast to 3 percent, down from 3.2 percent in October, and 3.4 percent in June. The Washington-based World Bank forecasts 3.3 percent global growth in 2016 and 3.2 percent in 2017.
On Tuesday evening President Obama will address the nation in his State of the Union address.
Obama is expected to offer some new tax proposals, including a plan to raise capital gains tax to 28 percent from 23.8 percent and impose a 7 basis point fee on the liabilities of large U.S. financial firms with assets over $50 billion dollars.
Some of his other proposals includes helping the middle class with a tax credit for families burdened by child care costs and a retirement tax reform plan that gives 30 million additional workers the opportunity to save for retirement through their employer.