- Big Tech Earnings: This week marks one of the busiest for earnings season, with reports from the ‘Magnificent 7’ and other megacaps shaping market sentiment.
- Critical Economic Data: The Q3 GDP advance estimate and PCE inflation data will provide clues on the economy’s strength and inflation trends ahead of the Fed’s November 6-7 interest rate decision.
- Labor Market Focus: October’s non-farm payrolls and unemployment rate will offer the final snapshot of labor market conditions, potentially setting the tone for the Fed’s decision-making.
In the final stretch before the Federal Reserve’s pivotal meeting and the U.S. election in early November, investors face a week packed with influential earnings releases and key economic data. With tech giants and megacaps leading the earnings, alongside Q3 GDP, PCE inflation, and labor data, this week’s results could be make-or-break for market expectations on future Fed moves and broader economic momentum.
Major Earnings Announcements
Numerous high-profile companies are reporting their Q3 results this week. Dominating headlines are:
- Big Tech: Earnings from Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOG), Meta Platforms (NASDAQ:META), Apple (NASDAQ:AAPL), and Amazon (NASDAQ:AMZN) will be closely scrutinized, as they represent a significant portion of market cap and are critical for gauging tech industry health.
- Financials and Payment Processors: Visa (NYSE:V) and Mastercard (NYSE:MA) will offer perspectives on the global payments landscape.
- Energy and Industrials: Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) are set to release results amidst volatile oil prices.
As large-cap companies provide earnings insights, markets will be assessing their outlook on economic resilience and cost pressures, particularly as the U.S. approaches the 2024 election cycle.
Crucial Economic Data
Economic reports this week are crucial as they will help shape expectations for the Fed’s November meeting.
- Q3 GDP Advance Estimate: This data will give the first glimpse of U.S. economic growth in Q3. Expectations are around 3% growth, mirroring Q2, with consumer spending likely a significant contributor.
- September PCE Inflation: Consensus expects a slight increase of 0.2% month-on-month. It rose by 0.1% in August 2024, below market expectations of a 0.2% increase. Markets will closely watch for any surprises here, as sustained inflationary pressures could affect the Fed’s rate path.
- October Non-Farm Payrolls and Unemployment Rate: Payrolls are expected to show a gain of around 140,000, with the unemployment rate holding at 4.1%. The labor market’s resilience or any weakness will be pivotal for the Fed, especially considering recent natural disruptions like Hurricane Milton.
Additionally, the ISM Manufacturing PMI is expected to remain in contraction, while JOLTS (Job Openings and Labor Turnover Survey) and ADP (Automatic Data Processing) Employment Change will provide further insights into labor dynamics and hiring trends.
Closing Summary
As investors approach a highly consequential Fed meeting and U.S. election, this week’s earnings, GDP, inflation, and labor data will be crucial in determining the market’s trajectory. With major tech, financials, and energy companies leading earnings, alongside critical economic indicators, market participants are likely to witness a week filled with directional signals that will shape the U.S. market’s path into the year’s end.
Disclaimer: ProsperUs Manager of Content Hailey Chung doesn’t own shares of any mentioned companies.
