Global Highlights This Week: Fed Leads Multiple Central Banks in Rate Decisions, Mega Earnings Week Ahead
U.S. major stock indices closed last week at record highs, with all three gaining ~2% for the week.
This week, global financial markets will focus on the Federal Reserve and other central banks. Additionally, Q3 earnings season will see a flurry of reports from tech giants.
The Fed will announce its rate decision on Wednesday Eastern Time (early Thursday Beijing Time), with markets widely expecting another 25-basis-point cut.
Allianz Research analysts said: “We expect the Fed to cut rates by 25bps again… a persistently weak labor market remains its primary concern.”
Investors will closely watch Fed Chair Powell’s subsequent press conference for clues on the pace and scale of future cuts. U.S. money market data shows traders expect a December rate cut as well.
With the U.S. government shutdown delaying key economic data, markets will pay special attention to Tuesday’s October consumer confidence index.
Additionally, the U.S. Treasury will auction $69 billion in 2-year notes and $70 billion in 5-year notes on Monday, and $44 billion in 7-year notes on Tuesday.
Besides the Fed, the European Central Bank, Bank of Japan, and Bank of Canada will also release rate decisions this week.
This week will be the busiest of earnings season, with over 170 companies reporting, including Microsoft, Apple, Alphabet (Google’s parent), Amazon, and Meta—five of the “Magnificent Seven.”
Though profit growth is slowing, these giants still significantly outpace the broader market. LSEG senior researcher Tajinder Dhillon estimates the “Magnificent Seven” will post 16.6% profit growth this quarter, compared to 8.1% for the rest of the S&P 500.
These tech giants are core players in artificial intelligence (AI), a key driver of recent stock market gains.
Ameriprise Financial chief market strategist Anthony Saglimbene said: “From now until year-end, the most influential factor will be earnings from these mega-cap tech firms. They face very high market expectations.”
(This Week’s Earnings Highlights)
Other companies reporting this week include healthcare giant UnitedHealth, pharma leader Eli Lilly, oil majors ExxonMobil and Chevron, and payment leaders Visa and Mastercard.
Key Global Economic Events This Week
Monday (Oct 27): UK October CBI Retail Sales Balance, Germany October IFO Business Climate, U.S. October Dallas Fed Business Activity Index
Tuesday (Oct 28): U.S. August FHFA House Price Index MoM, U.S. October Conference Board Consumer Confidence
Wednesday (Oct 29): Australia Q3 CPI YoY, Bank of Canada Rate Decision and Monetary Policy Report
Thursday (Oct 30): Fed FOMC Rate Decision, Fed Chair Powell Press Conference, Bank of Japan Rate Decision and Economic Outlook Report, European Central Bank Rate Decision
Friday (Oct 31): U.S. September PCE Data, APEC Leaders’ Summit