Earnings, Fed and Jobs Report

© Reuters.

by Daniel Shvartsman

Despite the high-profile earnings report failures, a surprise central bank move and bleak economic data, markets pushed higher to close out October. The main US indices -,, and – have each set all-time highs. European indices have also risen and cryptocurrency trading has seen a plethora of historic peaks and highs. That market optimism will be tested from all sides this week, in the form of a series of corporate earnings, nonfarm jobs and a Fed meeting expected to signal the start of the reduction in quantitative easing.

Here’s what you need to know to start your week.

  1. Profit season continues

Profits continue to be the main story for stock markets around the world. While many of the biggest names have already pointed out, Microsoft (NASDAQ 🙂 and Alphabet (NASDAQ 🙂 being the top performers last week and Apple (NASDAQ :), Amazon (NASDAQ 🙂 and Facebook (NASDAQ 🙂 – Meta – overdue, a much larger group of companies will update on the third quarter of this quarter.

These include:

  • Travel agencies like RyanAir (LON 🙂 (Monday), Air Canada (TSX 🙂 (Tuesday), Booking Holdings (NASDAQ 🙂 (Wednesday), Expedia (NASDAQ 🙂 (Thursday), and Amadeus IT (MC 🙂 (Friday).
  • Raw material producers or related companies such as ConocoPhillips (NYSE 🙂 (Tuesday), Diamondback Energy (NASDAQ 🙂 (Monday), Williams Companies Inc (NYSE 🙂 (Monday), Mosaic Co (NYSE 🙂 (Monday), CF Industries (NYSE 🙂 (Wednesday), EOG Resources (NYSE 🙂 (Thursday), Dominion Energy Inc (NYSE 🙂 (Friday) and Enbridge (NYSE 🙂 (Friday)
  • Technology companies from e-commerce to semiconductors to software, such as NXP Semiconductor (NASDAQ 🙂 (Monday), Arista Networks (NYSE 🙂 (Monday), Activision Blizzard (NASDAQ 🙂 (Tuesday), Electronic Arts (NASDAQ 🙂 (Wednesday), Etsy (NASDAQ 🙂 (Wednesday), Datadog Inc (NASDAQ 🙂 (Thursday), Skyworks (NASDAQ 🙂 (Thursday), Carvana Co (NYSE 🙂 (Thursday) and Wayfair (NYSE 🙂 (Thursday).
  • Industrial and pharmaceutical such as Pfizer (NYSE 🙂 (Tuesday), T-Mobile US Inc (NASDAQ 🙂 (Tuesday), Eaton (NYSE 🙂 (Tuesday), Cummins (NYSE 🙂 (Tuesday), Emerson (NYSE 🙂 (Wednesday), Humana (NYSE 🙂 (Wednesday), CVS Health (NYSE 🙂 (Wednesday), Toyota Motor Corporation ADR (NYSE 🙂 (Thursday), and Honda Motor Co Ltd ADR (NYSE 🙂 (Friday).

Supply chain issues and inflation will of course be on investors’ minds when they look at these reports, as well as the impact of slowing US growth in the third quarter on these companies and what that means for these companies. their respective perspectives. As businesses work shifts affected by the pandemic, determining what the new standard is for businesses recovering or were big winners in 2020 will also be on the agenda.

  1. Non-agricultural wage bill

After a disappointing October and mixed numbers, November will test the strength of the US economic recovery. Expectations are 385,000 new jobs, after the NFP missed expectations in each of the past two months.

Whether this lull was temporary and due to the surge in the summer delta variant or supply chain issues remains to be seen. The report could weigh on the Fed’s rate of reduction and could also give Democrats in Congress some extra push on their budget package negotiations.

  1. Fed meeting

The (FOMC) report comes out at 2 p.m. Wednesday after a two-day meeting. Fed Chairman Jerome Powell has said in recent weeks that the plan to start the reduction in November is still in effect, so the question is whether that will hold true.

Last week, the Bank of Canada decided to halt quantitative easing, and it remains to be seen how quickly central banks will move away from the extraordinary measures of the pandemic era and how the economy and markets will react.

Also to watch in Powell’s comments and what follows is his current take on inflation, after debates over whether it is transient or persistent, and what that means for the pace of interest rate hikes. in the months (years?) to come. It’s worth noting that the price broke on Friday after trading lower for much of the month and will be the center of attention if there are any surprises.

On Thursday, the released its November monetary policy decision, with many in the markets expecting a 15 basis point hike. It remains to be seen how the markets will handle the return of monetary tightening, no matter how much it is already “taken into account” via expectations.

  1. Manufacturing PMI reports

As we move into the holiday season to end the year, supply chain grunts and various growth slowdowns will take center stage. A number of PMI reports are coming out this week. China already with a disappointing 49.2, marking. The, the., And the rest of the euro area will all report. Expectations are for a general expansion – numbers above 50 on the index – and will give an additional indicator of how the global economy is preparing to end the year, and perhaps how long consumers will need to buy. their holiday gifts in advance.

  1. Crypto: another Bitcoin ETF and monetary tightening

Two weeks ago it was, and last week it was as a leading cryptocurrency to set a new all-time high. Meanwhile, smaller, less anchored coins, such as these, continue to grab the headlines.

There are two headlines to watch for the impact of crypto this week. First, a third bitcoin ETF is expected to start trading, as the VanEck Bitcoin Strategy (NYSE 🙂 ETF is expected to be listed by Wednesday. The excitement over the first ETF, ProShares Bitcoin Strategy ETF (NYSE :), may have propelled bitcoin to record highs, but the response to the second, Valkyrie Bitcoin Strategy ETF (NASDAQ :), has been more subdued.

It’s also worth watching how the crypto complex reacts to a tightening environment. Much of the crypto investment thesis relates to inflation and the value of money; an increase in the cost of capital through central bank tightening could make traditional currencies and assets relatively more attractive. While this is largely a coincidence, the tightening cycle in 2018 and the concurrent slump in crypto may be worth keeping in mind even as optimism in the industry remains high. .

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