Positive Economic Forecasts Dominate
The ghost of recession that was haunting the economic corridors seems to have been put to rest, at least for 2023. This week, the limelight is on the Commerce Department as it’s set to unveil the third quarter economic report of the U.S, which, according to pundits, carries a strong positive vibe.
The GDPNow model, a product of the Federal Reserve Bank of Atlanta, hints at a robust economic growth of 5.4%, on an annualized and seasonally adjusted basis, during the third quarter spanning from July to September.
Despite the odds stacked against it due to rising prices and stubborn inflation, consumer spending, the heart of the U.S economy, hasn’t missed a beat. The retail sector received a pleasant surprise in September as sales figures outperformed the forecasts yet again.
The last quarter, bearing the seasonal shopping spree, holds the key to whether this consumer-driven fiesta will continue. The unveiling of the Q3 GDP on the upcoming Thursday will shed light on this.
Earnings Galore: A Busy Week for Wall Street
Kickstarting the earnings week is Bank of Hawaii (BOH), with Cleveland-Cliffs (CLF) following suit. The recent rejection of a $7.3 billion buyout bid for U.S. Steel (X) by Cleveland-Cliffs remains a highlight.
The tempo picks up on Tuesday with a slew of earnings reports expected from industry titans like Microsoft (MSFT), 3M (MMM), Coca-Cola (KO), General Electric (GE), Spotify (SPOT), and Verizon (VZ).
Wednesday will see reports from Boeing (BA), Hilton (HLT), Mattel (MAT), and Meta (META), the parent of Facebook. It’s noteworthy that Meta recently showcased an array of AI-driven gadgets including smart glasses and the Quest 3 virtual reality headset.
On Thursday, the earnings cascade will include reports from Comcast (CMCSA), Mastercard (MA), Southwest Airlines (LUV), UPS (UPS), Chipotle Mexican Grill (CMG), and a much-awaited earnings disclosure from Kenvue (KVUE) post its separation from Johnson & Johnson (JNJ). Ford (F) will also share insights on its ongoing tussle with the United Auto Workers union, shedding light on its stance on labor agreements.
Rounding off the week will be ExxonMobil (XOM) and Colgate-Palmolive (CL). Exxon’s recent announcement to acquire Pioneer Natural Resources (PXD) for a whopping $60 billion is sure to reverberate.
Economic Indices and Data: What to Look For
Kicking off the week is an insight into the business climate via the Chicago Fed National Activity Index, followed by a peek into the U.S manufacturing and services sectors on Tuesday.
Wednesday brings an update on the 30-year fixed-rate mortgage, which is inching closer to 8%, a peak since November 2000. Also, the new home sales data will be out, revealing the aftermath of the 8.7% dip witnessed in August.
Thursday will not only bring the advance GDP report but also a snapshot of personal spending for Q3, alongside data on September’s durable goods orders.
Wrapping up the week on Friday is the Fed’s cherished inflation index — core PCE — for September, following a modest 0.1% hike month-over-month in August, cumulating to a 3.5% increase annually.
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