This week is a big one for financial markets, with several major economic data releases and central bank meetings scheduled. We have earnings reports due from Apple, McDonald’s, Pfizer, AMD, Caterpillar, Stellantis, Qualcomm, PayPal, Airbnb, and Starbucks, among others. Central banks around the world, including the US Federal Reserve, Bank of England( BOE ), and Bank of Japan( BOJ ) will also meet to discuss and set interest rates. Also in the US, we have the nonfarm payrolls reports for October, along with home prices and PMI survey readings. Preliminary third-quarter GDP and inflation readings for the eurozone will come out on Tuesday.
As of Friday, just under half of S&P 500 companies have reported earnings for the latest quarter, as we near the midpoint of earnings season. Of these, 78% have reported an earnings beat, with the average result coming in 7.7% above consensus estimates. On aggregate, S&P 500 companies are reporting year-over-year growth in earnings for the first time since the third quarter of last year, FactSet analysts said.
The Central Banks around the world, including the Fed, BOE and BOJ will meet to set interest rates. All these three central banks are expected leave rates unchanged but the guidance from the central banks could end up being hawkish than everyone anticipated. US data has been showing relatively good numbers lately and there doesn’t seem to be any reason for the Fed to deviate from the plan to keep monetary policy tight. BOE might just be done with increasing rates as inflation rates have been falling short of expectations lately. Japan though we could expect a surprise as there are talks of increasing the cap on yields which could ultimately seen as a step towards tighter monetary policy.
We also have employment reports from the US, Canada, Germany, New Zealand. The latest updates on the labor market are coming in this week, beginning on Wednesday with the Job Openings and Labor Turnover Survey (JOLTS) for September, which tracks the number of openings, hires, quits, and separations for a given month. Also on Wednesday, payroll services provider ADP will issue its National Employment Report for October, tracking gains in private sector payrolls. If job growth beats estimates again by a significant margin, it would underscore the strength and resilience of the labor market despite the impact of the Fed’s rate hikes. It would also suggest the economy is off to a strong start in the fourth quarter, after GDP rose at the fastest pace in almost two years in the third quarter.
We will also get the latest updates on national home prices with the US S&P Case-Shiller Home Price Index. After declining slightly in the second half of last year, as the Fed’s rate hikes started to take a toll on the housing market, home prices as tracked by the Case-Shiller Index have now rebounded for six straight months, reaching a new all-time high.
It will be a sight to behold and an interesting set of data releases to evaluate.
Have a successful trading week. Trade Safe, Happy Trading !