Stocks are heading into one of the busiest weeks of the year, with stocks near all-time highs.
A late-week rally led by a surge in Tesla (TSLA) stock saw the Nasdaq Composite Index end the week up about 0.9%, just shy of its new record high. Meanwhile, the S&P 500 (GSPC) fell more than 0.3%, and the Dow Jones Industrial Average (DJI) fell more than 2.6%.
In the coming week, we’ll see the Fed’s recommended inflation indicators, the October jobs report, and the earnings of tech giants Alphabet (GOOGL, GOOG), Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), and Meta. The latest information will be announced. (META) guides market direction heading into November kickoff.
Updates on economic growth, job openings, service and manufacturing activity and consumer confidence for the third quarter are also expected.
It’s a busy week for corporate earnings, with 169 companies in the S&P 500 scheduled to report their quarterly results. Ford (FORD), AMD (AMD), McDonald’s (MCD), Eli Lilly (LLY), and Exxon (XOM) are among the companies highlighting this schedule.
A slew of economic data over the coming week will test investors’ bets. First, on Wednesday, the Bureau of Economic Analysis is scheduled to release its advance forecast for third-quarter gross domestic product (GDP). The US economy is expected to continue its strong trajectory and grow at an annual rate of 3% in the second quarter, similar to the growth seen in the second quarter.
The latest measure of the Fed’s recommended inflation indicator is expected to be released on Thursday. Economists expect annual “core” PCE, which excludes the volatile categories of food and energy, to be 2.6% in September, down from 2.7% in August. Economists expect last month’s “core” PCE to be 0.3% (previous month: 0.1%).
On Friday, the Bureau of Labor Statistics is scheduled to release a new look at the national employment situation. The October jobs report is expected to add 125,000 nonfarm payrolls to the U.S. economy and hold the unemployment rate steady at 4.1%, according to Bloomberg data. The US economy added 254,000 jobs in September, and the unemployment rate fell to 4.1%.
“After two hurricanes, strikes, and planned furloughs, we expect a lot of upheaval in next Friday’s October jobs report,” RBC Capital Markets’ Michael Reed said in a note to clients on Thursday. said.
Given the variety of factors that could weigh on job growth, Reed wrote that the unemployment rate “will likely be the best indicator of the labor market this month.”
Heading into a busy week of economic data, markets are pricing in a 96% chance that the Federal Reserve will cut interest rates at its November meeting, according to the CME FedWatch tool.
With 37% of the S&P 500 reporting quarterly earnings, the index is on pace for year-over-year earnings growth of 3.7%. This would be the slowest annual growth rate since the second quarter of 2023, according to FactSet.
Over the coming week, Big Tech’s earnings will test that narrative. FactSet recently predicted that the “Magnificent Seven” tech stocks are expected to have 18.1% year-over-year earnings growth this quarter, while the other 493 companies in the S&P 500 are expected to grow just 0.1%. He pointed out that he was doing so.
Apple, Alphabet, Amazon, Meta and Microsoft are all expected to report quarterly results next week, after a late-week rally in tech stocks sent several big tech companies back near record highs. This report will put a renewed focus on artificial intelligence. Investors will be listening for clues about how much these companies are spending on emerging technology and whether it’s paying off.
Given the recent rally in Big Tech stocks, Nancy Tengler, CEO and chief investment officer of Laffer Tengler Investments, warned Yahoo Finance that reaction to earnings releases could be muted.
“The risk is that a company like Microsoft will beat (expectations) about 76% of the time in historical earnings, and you might not get anything out of the stock,” Tengler said.
Over the past month, economic data has surprised and turned around Wall Street. The Citi Economic Surprise Index, which measures whether economic data is better or worse than expected, rose to its highest level since April.
This is in line with the rise in the 10-year Treasury yield (^TNX), which has increased by about 50 basis points over the past month and is hovering around 4.2%. In some cases, rising yields could be a headwind for stocks. But as Carrie Cox, chief market strategist at Ritholtz Wealth Management, pointed out in They argue that this could be a welcome sign.
Gargi Chaudhry, chief investment and portfolio strategist at BlackRock Americas, told Yahoo Finance: “The gradual rise[in yields]is due to good reasons to expect higher growth and is a historical trend. “The trend is positive for companies that are growing profits.” . “So keeping quality at the heart of the portfolio remains very important.”
weekly calendar
Monday
Economic Data: October Dallas Fed Manufacturing Activity (Forecast -9, Previously -9)
Earnings: Ford (F), Phillips (PHG), Waste Management (WM)
Tuesday
Economic Data: S&P CoreLogic 20 City YoY NSA, August (5.92% YoY). Conference Board Consumer confidence, October (expected 99.0, advance 98.7) JOLTS Job openings, September (expected 7.9 million, advance 8.04 million). Dallas Fed Service Activities, October (previous year -2.6)
Revenue: Alphabet (GOOGL, GOOG), AMD (AMD), BP Oil (BP), Chipotle (CMG), Crocs (CROX), McDonald’s (MCD), JetBlue (JBLU), PayPal (PYPL), Pfizer (PFE) , Reddit (RDDT), Royal Caribbean Group (RCL), Snap (SNAP), SOFI (SOFI), Visa (V)
Wednesday
Economic data: MBA home loan applications, week ending October 25 (-6.7% last week). ADP private salaries, October (expected +100,000, previous +143,000). GDP annual rate change from previous quarter, 3rd quarter advance forecast (forecast 3%, advance forecast 3%). Core PCE Price Index increased QoQ in Q3 (+2.8% YoY). Pending housing sales in September compared to the previous month (0.6% compared to the previous month)
Revenue: ADP (ADP), Caterpillar (CAT), Carvana (CVNA), Coinbase (COIN), Etsy (ETSY), Eli Lilly (LLY), Microsoft (MSFT), Meta (META), Roku (ROKU), Robinhood ( HOOD), Starbucks (SBUX)
Thursday
Economic data: September core PCE index m/m (expected +0.2%, previously +0.1%). September core PCE index year-on-year change (forecast +2.6%, previous +2.7%). Number of new unemployment insurance claims for the week ending October 26 (previously 227,000). Continuing claims, week ending October 19 (previously 1.897 million). Third quarter employment cost index (expected 0.9%, previously 0.9%). Challenger personnel reductions compared to the same month last year in October (+52.4% compared to the previous year). Personal income for September (expected +0.4%, previous +0.2%). Personal spending in September (expected +0.4%, previous +0.2%). MNI Chicago PMI, October (was 46.6)
Revenue: Apple (AAPL), Amazon (AMZN), Conoco Philips (COP), Estée Lauder (EL), Keranova (K), Intel (INTC), Mastercard (MA), Norwegian Cruise Line (NCL), Peloton ( PTON), Merck (MRK), SiriusXM (SIRI)
Friday
Economic calendar: Non-farm employment in October (forecast +125,000, previous +254,000). Unemployment rate for October (4.1% expected, 4.1% previously). Average hourly wage in October compared to the previous month (forecast +0.3%, previous +0.4%). Average hourly wage, YoY, October (expected +4%, previous +4%). Average weekly working hours, October (expected 34.2 hours, previous 34.2 hours). Labor force participation rate (previously 62.7%). S&P Global US Manufacturing PMI, October final (previously 47.8). ISM Manufacturing, October (47.6 forecast, 47.2 advance). ISM Paid Price, October (was 48.3)
Revenue: Charter Communications (CHTR), Dominion Energy (D), fuboTV (FUBO), Chevron (CVX), Exxon Mobil (XOM), Wayfair (W)
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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