The roar of the giants!
While BoC, BoJ, and ECB policy meetings and press conferences will be important for many markets, however, the main focus in the stocks markets will be on FAANG earnings reports! On the other hand, the initial estimates for GDP numbers in the EU, Canada, and the US must give us some idea of the overall economic condition. On top of all that, we will have many other economic data, which we need to watch carefully including, Australian inflation, and US PCE.
#1- Earnings Reports
This week will be very important for stocks markets, as tech Giants will report, including Facebook, Microsoft, Amazon, Apple, and Alphabet, with Boeing and Robinhood Markets. So far, we had 23% of listed companies in the S&P 500 that already announced their Earnings, and 84% of them had positive EPS with 75% positive revenue.
#2- US Consumer Confidence & Expectation – Tuesday
Consumer Confidence is one of the most important indexes that can tell us what we have to expect from upcoming Retails Sales and GDP, and always is very important for the market participant. For this week we are waiting to see another weakness after recording a seven-month low of 109.3 in September, the same for Consumer expectation, after seeing a 10-month low of 86.6 in September. This weakness is not expected to support the stock markets, as already market expecting the tapering with a sharp increase in inflation levels.
#3- US Durable Goods Orders – Wednesday
It is not just about the Boeing to see the weakness with just 27 new orders during the month, in general, we are expecting to see the durable goods orders decrease 0.8% in September, mostly due to issues seen in the transportation sector. Also, in the Auto sectors, we are expecting to see the output in September to slump by the most since April, mostly because of a severe shortage of semiconductors.
#4- BoC Monetary policy meeting – Wednesday
With a well-going recovery after the COVID crisis, the Canadian economy has softened modestly over the past few weeks, which is not unexpected, and we can say that it is the normal path of economic recovery after a sharp global decline. So, the economy is strong enough to warrant a further tapering of asset purchases by the Bank of Canada to C$1 billion per week. We also should not forget about the BoC Economy outlook. This meeting is overall supposed the support the Loonie against its crosses.
#5- BoJ Monetary policy meeting - Thursday
As the Japanese still have no inflation concerns and the economy due to slumping exports and output, is not going as well as expected, we are not expecting to see BoJ to make any changes in its interest rates and asset purchases amount. This holding policy is supposed to lift the Nikkei 225, and overall, Japanese stock markets.
#6- ECB Monetary policy meeting – Thursday
After Canadian and Japanese central banks, it will be the ECB`s turn. Despite the increasing inflation in the past weeks, we do not expect to see any changes in the European Central Bank monetary policies, including interest rates and asset purchasing amount. In a previous meeting in September, ECB already announced that Q4 asset purchases would be conducted at a slower pace relative to purchases in Q2 and Q3, and it will be the same and unchanged in this meeting. This policy is expected to hold the Euro weakness against its crosses.
#7- US Personal Income & Spending – Friday
While we are expecting to see a decrease in the income level in September, mostly because that unemployment benefits expired at the start of the month, we look for a 0.3% monthly gain in the September spending level. This week, we have to closely watch the prices as they will give us more information from consumers` purchasing power. What we are expecting is that increased spending in September to lift the inflation, which is again supposed to support the Hawkish policies. These numbers are expected to increase the US Dollar value.
