①The Federal Reserve, the European Central Bank, the Bank of Japan, and the Bank of Canada will all announce their interest rate decisions next week; ②Next week will be the busiest week of earnings season, with over 170 companies expected to report results, including five of the so-called “Magnificent Seven.”
Cailian News, October 26 (edited by Xia Junxiong) — Major U.S. stock indexes ended the week on a historic high note, with all three major indices rising approximately 2%.
Next week, the focus of global financial markets will center on several central banks led by the Federal Reserve. In addition, the Q3 earnings season for U.S. stocks will see reports from multiple tech giants.
The Federal Reserve will announce its interest rate decision at 2:00 p.m. Eastern Time next Wednesday (early Thursday morning Beijing time). The market widely expects policymakers to cut rates by another 25 basis points.
Analysts at Allianz Research stated, “We expect the Federal Reserve to cut interest rates by another 25 basis points… Persistent weakness in the labor market remains their primary concern.”
Investors will closely watch Fed Chair Powell’s subsequent press conference to gauge the extent and pace of future rate cuts. U.S. money market data shows investors generally anticipate another rate cut by the Fed in December.
Due to delays in releasing various economic data caused by the shutdown of the U.S. federal government, the market will pay special attention to the October consumer confidence index published on Tuesday.
In addition, the U.S. Treasury Department will issue $69 billion in two-year Treasury bonds and $70 billion in five-year Treasury bonds on Monday, and $44 billion in seven-year Treasury bonds on Tuesday.
Apart from the Federal Reserve, the European Central Bank, the Bank of Japan, and the Bank of Canada will also announce their interest rate decisions next week.
Next week will be the busiest week of earnings season, with more than 170 companies expected to release their results, including five of the so-called “Magnificent Seven”: Microsoft, Apple, Alphabet (parent company of Google), Amazon, and Meta.
Although the profit growth of these giants is narrowing, it remains significantly higher than the overall level. Tajinder Dhillon, a senior researcher at LSEG, forecasted that the ‘Big Seven’ would achieve a profit growth of 16.6% this quarter, compared to 8.1% for other S&P 500 index companies.
These tech giants are also core participants in the artificial intelligence (AI) industry, and the AI boom has been one of the main drivers of the stock market’s rise in recent years.
Anthony Saglimbene, Chief Market Strategist at Ameriprise Financial, stated: ‘The most influential factor from now until the end of the year will be the earnings reports of these large technology companies. The market expectations they face are extremely high.’
(Earnings report highlights for next week)
Other companies scheduled to release their earnings reports next week include healthcare giant UnitedHealth, pharmaceutical company Eli Lilly and Co, two major oil giants Exxon Mobil and Chevron, as well as payment giants Visa and MasterCard.
Overview of important overseas economic events for next week (Beijing time):
Monday (October 27): UK CBI Retail Sales Differential for October, Germany IFO Business Climate Index for October, US Dallas Fed Business Activity Index for October
Tuesday (October 28): US FHFA House Price Index MoM for August, US Conference Board Consumer Confidence Index for October, US Conference Board Consumer Confidence Index for October
Wednesday (October 29): Australia CPI YoY for Q3, Bank of Canada announces interest rate decision and monetary policy report
Thursday (October 30): Federal Reserve FOMC announces interest rate decision, Federal Reserve Chair Powell holds press conference on monetary policy, Bank of Japan announces interest rate decision and economic outlook report, European Central Bank announces interest rate decision
Friday (October 31): US September PCE data release, APEC Leaders’ Summit held