Eyes on Earnings Reports!
Last week ended on the right foot in Wall Street, which got supported by great earnings reports and hopes on FED's patience to raise interest rates. On the other hand, inflation worries are still all around the markets, and along with global supply shortages, acting as speed restrictions for major economies. For the week ahead, everything will be about Earnings reports, while we should not forget about many other important economic data as well.
Earnings Reports.
Last week Banks started the journey wonderfully. And now, in the week ahead, we have to see what others do. This week, J&J, Netflix, and Philip Morris on Tuesday, Tesla, Verizon, and IBM on Wednesday, PayPal, Intel, and AT&T on Thursday, Honeywell, and American Express on Friday will be in the spotlight and followed closely by investors.
Chinese GDP – Monday
The economy's most important index will tell us about Chinese GDP growth in the third quarter of 2021. Initial estimates for this quarter are to see a bit slow down to 5.2% from earlier 7.9% estimates. Recent COVID-related restrictions and Power shortages slowed the recovery in the service sectors and manufacturing production in China. Besides them, regulatory changes, and real estate disruptions that were observed last month all together causing this ease. These numbers are expected to hold the Yuan weakness against the USD.
US Housing Starts - Tuesday
One of the most affected types of housing during the pandemic was the Single-family houses that were decreasing, as many people already decided to work from home, even after the pandemic, so they need more space in the House, even people who live alone. And now with reopenings, again we can see single houses also increasing. Overall, the housing market has been increasing this year, and it is still expected to see continuing. Besides Housing starts, Thursday, we do also have the US Existing Home Sales. In the past months, we saw slowdowns in the Pending Home Sales, but this slowdown is mostly because of exceptionally tight inventory levels. The number of available homes for sale in August fell to 1.29 million units, which is decreased by 13.4% over the year ago.
UK inflation numbers – Wednesday
BoE to decide when to increase the interest rates, need to see the CPI numbers. Inflation in the UK has been increasing in the past months, however, we are waiting to see it slow down a bit in September. While inflation has been increasing, in the past months market participants pricing more on faster rate hikes even before the end of this year, much faster than earlier expectations. If the inflation increasing col-off a bit as it is expected, we can count the rate hike to happen later in 2022, which will put the pound under pressure against its crosses.
EU PMI numbers - Friday
As seen in previous weeks elsewhere, for EU also it is expected to have weaker numbers for Purchasing Managers indices, for both Manufacturing and Service sectors, confirming that the latest shortages have hurt economic growth. If how it is expected, we see another small increase or even a bit decrease in the economic data, it will make the ECB to hold its current ultra-dovish policies for a bit longer term, which is not in favor of the Euro, especially against USD. Thanks for watching this video, hope it will be a great week for you
