Monday October 10, 2022: $140.42 +$0.33 +0.24%
Oct 10, 2022 1:36:24 GMT -8
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Post by Dave on Oct 10, 2022 1:36:24 GMT -8
Good morning. It’s Columbus Day. The banks are closed but the market is open. This morning’s pre-market is red at -0.53% at this moment.
What to Expect in the Markets Next Week
What to Expect in the Markets Next Week
Corporate earnings season kicks off next week with several big banks and financial firms, including JPMorgan Chase, Morgan Stanley, BlackRock, and Citigroup, set to report earnings. Other major firms such as PepsiCo, TSMC, Delta Air Lines, and UnitedHealth are also scheduled to release results. Key reports on consumer and producer inflation, retail sales, and consumer confidence will become available next week. Meeting minutes from the FOMC’s latest policy meeting, held September 20-21, will be released Wednesday.
Next week could also be a big one for cryptocurrency markets, as regulatory changes may be on the horizon. The G20’s Financial Stability Board (FSB) is expected to unveil plans to regulate the crypto and decentralized finance (DeFi) industries at the coming G20 meeting in Washington on Wednesday and Thursday. This week, the U.S. Financial Stability Oversight Council (FSOC) called for greater oversight of cryptocurrency markets, particularly more volatile stablecoins.
Tuesday, October 11
Pinnacle Financial Partners (PNFP) reports earnings
NFIB Business Optimism Index (Sep)
IBD/TIPP Economic Optimism Index (Oct)
Consumer Inflation Expectations (Sep)
Wednesday, October 12
PepsiCo (PEP), Infosys Ltd. (INFY), and Wipro Ltd. (WIT) report earnings
Producer Price Index (PPI) Inflation (Sep)
FOMC Meeting Minutes (Sep. 20-21 Meeting)
Thursday, October 13
TSMC (TSM), Wells Fargo (WFC), BlackRock (BLK), Progressive Corp. (PGR), Walgreens Boots Alliance (WBA), Fastenal Co. (FAST), Delta Air Lines (DAL), and Domino’s Pizza (DPZ)
Consumer Price Index (CPI) Inflation (Sep)
Friday, October 14
UnitedHealth Group (UNH), JPMorgan Chase (JPM), Morgan Stanley (MS), Citigroup (C), PNC Financial Services (PNC), U.S. Bancorp (USB), and First Republic Bank (FRC) report earnings
Retail Sales (Sep)
Import & Export Prices (Sep)
Business Inventories (Aug)
Michigan Consumer Sentiment Index - Preliminary Reading (Oct)
Big Banks' Earnings
Next week, corporate earnings season kicks off with earnings reports from some of the world’s largest banks and financial institutions. JPMorgan Chase, Wells Fargo, BlackRock, Morgan Stanley, Citigroup, U.S. Bancorp, and PNC Financial Services are all scheduled to report, while Bank of America and Goldman Sachs will report the following week. Financial sector stocks can act as a bellwether for other sectors, as they are highly sensitive to changes in interest rates and broader economic conditions.
Shares of banks and other financial firms tend to benefit from rising interest rates, as higher rates yield higher interest income, positively impacting net interest margins. However, analysts at FactSet are projecting financial sector earnings will fall 13.5% on average this quarter, as earnings could be negatively impacted by a slowdown in investment banking activity and lower refinancing demand for mortgages and other consumer loans as interest rates rise. Financial sector stocks have fallen about 18% year-to-date on average, compared with a 23% decline for the S&P 500 over the same period.
Inflation Reports
On Wednesday, the Bureau of Labor Statistics (BLS) will release the September Producer Price Index (PPI), tracking inflation from the standpoint of goods-producing businesses. Producer prices likely rose 0.2% from a month earlier in September, after declining over the previous two months. Producer price inflation has slowed markedly in recent months, decelerating to an 8.7% annual rate in August, down from a 40-year high of 11.7% in March. Core prices, which exclude food and energy components, likely rose 0.3% on the month or 7.1% year-over-year, after rising 0.4% in August.
The widely-anticipated Consumer Price Index (CPI) for September will follow on Thursday. Consumer prices are projected to have risen 0.2% last month, compared with a 0.1% gain in August and a flat reading in July. On an annual basis, headline CPI inflation is expected to have moderated slightly to 8.1% in September, down from 8.3% in August. Core CPI inflation is projected to have accelerated slightly to a 6.5% annual rate, up from 6.3% in August.
September Retail Sales
On Friday, the U.S. Census Bureau will release its monthly report on retail sales for the month of September, indicating whether consumer spending remained strong last month. Retail sales are projected to have risen 0.2% month-over-month, compared with a 0.3% increase in August and a 0.4% decline in July. Retail sales growth has slowed sharply in recent months, decelerating from a peak growth rate of 2.7% in January, as rising inflation and higher interest rates—driven by the Federal Reserve’s tightening of monetary policy—have weighed on consumer budgets. A stronger-than-expected retail sales reading could further support the Fed’s case for continued interest rate hikes.
Next week could also be a big one for cryptocurrency markets, as regulatory changes may be on the horizon. The G20’s Financial Stability Board (FSB) is expected to unveil plans to regulate the crypto and decentralized finance (DeFi) industries at the coming G20 meeting in Washington on Wednesday and Thursday. This week, the U.S. Financial Stability Oversight Council (FSOC) called for greater oversight of cryptocurrency markets, particularly more volatile stablecoins.
Tuesday, October 11
Pinnacle Financial Partners (PNFP) reports earnings
NFIB Business Optimism Index (Sep)
IBD/TIPP Economic Optimism Index (Oct)
Consumer Inflation Expectations (Sep)
Wednesday, October 12
PepsiCo (PEP), Infosys Ltd. (INFY), and Wipro Ltd. (WIT) report earnings
Producer Price Index (PPI) Inflation (Sep)
FOMC Meeting Minutes (Sep. 20-21 Meeting)
Thursday, October 13
TSMC (TSM), Wells Fargo (WFC), BlackRock (BLK), Progressive Corp. (PGR), Walgreens Boots Alliance (WBA), Fastenal Co. (FAST), Delta Air Lines (DAL), and Domino’s Pizza (DPZ)
Consumer Price Index (CPI) Inflation (Sep)
Friday, October 14
UnitedHealth Group (UNH), JPMorgan Chase (JPM), Morgan Stanley (MS), Citigroup (C), PNC Financial Services (PNC), U.S. Bancorp (USB), and First Republic Bank (FRC) report earnings
Retail Sales (Sep)
Import & Export Prices (Sep)
Business Inventories (Aug)
Michigan Consumer Sentiment Index - Preliminary Reading (Oct)
Big Banks' Earnings
Next week, corporate earnings season kicks off with earnings reports from some of the world’s largest banks and financial institutions. JPMorgan Chase, Wells Fargo, BlackRock, Morgan Stanley, Citigroup, U.S. Bancorp, and PNC Financial Services are all scheduled to report, while Bank of America and Goldman Sachs will report the following week. Financial sector stocks can act as a bellwether for other sectors, as they are highly sensitive to changes in interest rates and broader economic conditions.
Shares of banks and other financial firms tend to benefit from rising interest rates, as higher rates yield higher interest income, positively impacting net interest margins. However, analysts at FactSet are projecting financial sector earnings will fall 13.5% on average this quarter, as earnings could be negatively impacted by a slowdown in investment banking activity and lower refinancing demand for mortgages and other consumer loans as interest rates rise. Financial sector stocks have fallen about 18% year-to-date on average, compared with a 23% decline for the S&P 500 over the same period.
Inflation Reports
On Wednesday, the Bureau of Labor Statistics (BLS) will release the September Producer Price Index (PPI), tracking inflation from the standpoint of goods-producing businesses. Producer prices likely rose 0.2% from a month earlier in September, after declining over the previous two months. Producer price inflation has slowed markedly in recent months, decelerating to an 8.7% annual rate in August, down from a 40-year high of 11.7% in March. Core prices, which exclude food and energy components, likely rose 0.3% on the month or 7.1% year-over-year, after rising 0.4% in August.
The widely-anticipated Consumer Price Index (CPI) for September will follow on Thursday. Consumer prices are projected to have risen 0.2% last month, compared with a 0.1% gain in August and a flat reading in July. On an annual basis, headline CPI inflation is expected to have moderated slightly to 8.1% in September, down from 8.3% in August. Core CPI inflation is projected to have accelerated slightly to a 6.5% annual rate, up from 6.3% in August.
September Retail Sales
On Friday, the U.S. Census Bureau will release its monthly report on retail sales for the month of September, indicating whether consumer spending remained strong last month. Retail sales are projected to have risen 0.2% month-over-month, compared with a 0.3% increase in August and a 0.4% decline in July. Retail sales growth has slowed sharply in recent months, decelerating from a peak growth rate of 2.7% in January, as rising inflation and higher interest rates—driven by the Federal Reserve’s tightening of monetary policy—have weighed on consumer budgets. A stronger-than-expected retail sales reading could further support the Fed’s case for continued interest rate hikes.