The Market news you need to know for the week by Blackmount Advisors.
US earnings, EU Summit and Brexit, US retail sales and industrial production, Chinese data, annual meetings of World Bank and IMF and Japan’s inflation data will dominate the week.
EU leaders will meet in Brussels on Thursday and Brexit is expected to influence the discussions as the October 31 deadline to pull the UK out of the EU looms. Brussels has given the go-ahead to intensive negotiations with the UK on Brexit, in a sign that the EU believes a new exit deal may be possible in the coming weeks.
In US, retail sales are forecast to have risen by 0.3% m/m in September, marginally weaker than the prior month but nevertheless a solid figure.
In China, exports are forecast to have fallen again in September, with analysts projecting a 3% drop y/y, down from -1% in August. On Friday, more key data will follow with the release of industrial output, urban investment and retail sales numbers, as well as the Q3 GDP estimate. GDP growth is forecast to have slowed further in Q3 to 6.1% y/y from 6.2% in Q2.
However, industrial output and retail sales prints for September are both forecast to have improved slightly from the prior month. On the corporate front, Q3 earnings season unofficially kicks off this week, with 50 companies on the S&P 500 announcing their earning results including JPMorgan, Citi, Wells Fargo, Bank of America, Morgan Stanley, Netflix, IBM, Honeywell, Schlumberger and CSX among others. FactSet currently projects a 4.1% decline in earnings in Q3 that, if it holds out, would mark the largest drop in EPS since the start of 2016.