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The focus of investors next week will be on the retail sales print and industrial production report to gauge the economy ahead of the Federal Reserve’s next policy meeting on November 7. Options trading on the federal funds contract implies a 90% probability of a 25-point rate cut, despite some recent conflicting economic data. As for bond yields, Seeking Alpha Investing Group Leader Lawrence Fuller thinks the two-year Treasury yield’s recent rise to 4% is likely a short-term market emotion, and it should decline towards 3.5% as data confirms a soft landing. In Europe, the European Central Bank is expected to fire off a 25-point interest rate cut following recent lower-than-expected inflation readings.
Earnings heat up in the week ahead, with Netflix (NASDAQ:NFLX), Procter & Gamble (NYSE:PG) (bull view) (cautious view), Taiwan Semiconductor (TSM) are some of the notable companies due to report. The healthcare sector will also be in focus, with UnitedHealth (UNH), Johnson & Johnson (JNJ), and Abbott Laboratories (ABT) all lined up to report. Aggregate earnings are expected to reach a new all-time high for the second straight quarter, with a current estimate of $511.4 billion in Q3, surpassing last quarter’s actual figure of $504.8 billion, per data from Lipper Alpha Insight. However, Q3 earnings were noted to face tougher year-over-year comparisons, resulting in an expected growth rate of 5.0%, down from the 13.2% seen last quarter. Analysts expect the energy sector to see some of the sharpest cuts in guidance alongside the quarterly corporate earnings updates. The
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