Top 5 Things to Watch in Markets in the Week Ahead
Inflation data
The U.S. is set to release highly anticipated inflation data for September this week. Investors will closely analyze the price index data as they continue to assess the Federal Reserve’s stance on interest rates. August’s Consumer Price Index (CPI) report showed the fastest increase in 14 months, driven by a surge in gasoline prices. However, core inflation, which excludes food and fuel costs, rose at the slowest pace in nearly two years. The recent strong jobs report, which showed a larger-than-expected surge in employment but slowing wage growth, suggests that monetary policy could remain tight for some time. Hot inflation figures could reinforce the Fed’s message that interest rates need to remain higher for longer.
Fed minutes
On Wednesday, the Federal Reserve will publish the minutes of its September meeting. Market watchers will be looking for clues on whether policymakers are leaning towards another rate hike before the end of the year. Additionally, investors will have the opportunity to hear from several Fed officials during the week, including Atlanta Fed President Raphael Bostic, Minneapolis Fed President Neel Kashkari, Boston Fed President Eric Rosengren, Dallas Fed President Robert Kaplan, Vice Chair Richard Clarida, and Governor Christopher Waller.
Third quarter earnings kick-off
Third quarter earnings season will kick off with reports from several major banks. JPMorgan, Citigroup, and Wells Fargo are all due to report ahead of the market open on Friday. Investors will be closely watching for signs of the impact of higher interest rates on loan demand and consumer behavior. Other companies, such as PepsiCo, Delta Air Lines, and UnitedHealth Group, are also set to report during the week. Earnings season could determine the near-term path for stocks, as the market still holds a 10% gain for the year despite recent pullbacks.
Oil prices
Last week, oil prices experienced their steepest weekly losses since March. Concerns over macroeconomic headwinds and a partial lifting of Russia’s fuel export ban contributed to the decline. The week ended with Brent futures settling at $84.58 per barrel and WTI settling at $82.79. Worries about persistently high interest rates slowing global growth and impacting fuel demand, coupled with ongoing supply cuts by Saudi Arabia and Russia, have weighed on oil prices. Escalating geopolitical risks in the Middle East could further impact oil prices in the week ahead.
IMF and World Bank meetings
Global finance officials and central bankers are gathering in Marrakesh for the annual meetings of the International Monetary Fund (IMF) and the World Bank. The meetings will take place against a backdrop of concerns over whether inflation can be controlled without triggering a crisis in major economies. Central bankers and policymakers will make multiple appearances, and the IMF’s World Economic Outlook, which includes updated forecasts, will be released on Tuesday.
–Rewritten article–
