Top 5 Things to Watch in Markets in the Week Ahead
Earnings Season Picks Up
As we enter the third quarter, earnings season is picking up steam. This season is expected to show an improvement in profit growth after a slow start to the year. Some major U.S. companies, including Tesla, Bank of America, Goldman Sachs, and regional banks, are set to report their results this week. These companies’ shares have been driving the rally in equity markets throughout the year. Other notable names reporting this week include Johnson & Johnson, Procter & Gamble, Netflix, and Philip Morris. It will be interesting to see how these earnings reports shape market sentiment.
U.S. Data; Fedspeak
In addition to earnings, investors will be keeping a close eye on U.S. retail sales figures for September, which are due on Tuesday. These figures will provide insights into the strength of consumer spending, a key driver of the economy. Fed Chair Jerome Powell will also be addressing the Economic Club of New York, where market watchers will be eagerly listening for any hints about monetary policy. Several regional Fed presidents and governors are also scheduled to make speeches throughout the week, adding further perspective on the state of the economy.
Oil Volatility
Last week, oil prices surged almost 6% due to escalating geopolitical tensions in the Middle East and the U.S.’s move to impose sanctions on owners of tankers carrying Russian oil. Investors and market observers are closely monitoring the situation to assess its potential impact on global oil and gas supplies. With Russia being a major oil producer and exporter, any disruptions in its shipments could curtail supply. This volatility in oil prices will have implications for various sectors and could shape market sentiment.
China Data
Market watchers will be closely observing a series of economic data out of China this week. This data will provide insights into whether the country’s uneven recovery is stabilizing and shed light on the impact of the crisis in the property sector. Economists are expecting modest growth in gross domestic product, which is still below Beijing’s annual growth target. Additionally, reports on industrial production, retail sales, and fixed asset investment will provide further indications of China’s economic performance. These figures will be closely watched as China’s economy continues to be a major driver of global growth.
U.K. Data
In the U.K., the latest inflation report will be released, followed by figures for job growth. These reports will be the final ones ahead of the Bank of England’s upcoming November meeting. It will be interesting to see if inflation continues to remain above the Bank of England’s target and how the job market is faring. The Bank of England’s decision to keep rates on hold for the first time in almost two years has raised speculation that peak rates have been reached. However, the central bank has indicated its readiness to take further action if needed to rein in inflation. These reports will provide further insights into the U.K.’s economic outlook.
As the week unfolds, geopolitical developments, earnings reports, economic data, and central bank speeches will shape market sentiment. Investors will be keenly watching these factors to navigate the ever-changing landscape of the global markets.
