Just as the stock market begins to falter, Wall Street is heading into its most newsy week before the election. Next week, investors will be watching earnings results from five of the seven largest companies. Alphabet’s results will be released on Tuesday. Microsoft and Meta Platforms released their report on Wednesday. Results from Amazon and Apple will be released on Thursday. In addition, there are important data releases, including the employment report, inflation data and preliminary third-quarter gross domestic product data. The releases could add an exciting mix to a market already showing signs of pre-election jitters. The CBOE Volatility Index, known as Wall Street’s fear gauge, climbed back above 20 points this week. .SPX 1M Mountain S&P 500 “I think this period we’re in right now is like a weird brew,” said Mark Malek, head of investments at Siebert. “It’s either going to be a good week or a bad week, depending on how things go.” On Friday, the Nasdaq Composite hit a record high but the S&P 500 ended a six-week winning streak. Treasury yields rebounded this week, with the U.S. 10-year Treasury yield rising above 4.25% before falling back to around 4.2%. Earnings from the “Big Seven” of big tech companies are due next week, but excitement around the names has been tempered in part by high valuations and lower expected profit growth. In the third quarter, the Big Seven’s profits are expected to increase by 18% year-on-year. That’s down from about 35% in the second quarter, according to FactSet. Indeed, the high concentration of large-cap leaders in the S&P 500 prompted Goldman Sachs’ David Kostin this month to issue a bleak long-term forecast for the overall market. He expects the market to return only 3% annually over the next 10 years, instead of the 13% annualized return for the S&P 500 over the past 10 years. This concentration may be fully reflected next week. While the “top seven” are expected to see strong earnings growth, the remaining 493 S&P 500 companies are expected to post annual growth of just 0.1% in the third quarter, according to FactSet. “While we tried to find a new path to lead us in a new direction, we found that all roads led back to the Mag 7,” said Siebert’s Malik. Big data gives many observers reason to be optimistic about the market. Stocks typically rebound toward the end of the year because September and October are exceptionally strong, especially in a presidential election year. Even now, some stores are raising their 2024 targets. Nicole Inui, head of equity strategy at HSBC, raised her year-end target for the S&P 500 to 5,900 points. She cited the Goldilocks results, which were “correctly” priced in given strong economic growth and easing inflation, as well as an extended rally in big tech stocks. “The pieces of a bull market scenario are falling into place,” Ganye wrote. News released next week could add confidence to that narrative. Friday’s October jobs report is expected to show the U.S. economy added 140,000 jobs, according to economists polled by FactSet. The personal consumption expenditures (PCE) price index released on Thursday is expected to show price pressures falling to 2% from 2.2%. At the same time, according to FactSet data, the preliminary value of gross domestic product in the third quarter is expected to grow by 2.1%, lower than the previous 3%. The report will be submitted on Wednesday. Elsewhere, investors are also looking forward to the JOLTS survey and consumer confidence data due early this week. One week ahead calendar all times are Eastern Time. Monday, October 28, 10 a.m. Richmond Fed Index (October) 10:30 a.m. Dallas Fed Index (October) Gains: Ford Motor, ON Semiconductor Tuesday, October 29, 8:00 a.m. 30 Preliminary Wholesale Inventory Data (September) 9am FHFA Home Price Index (August) 9am S&P/Case-Shiller comp.20 HPI (August) 10am Consumer Confidence Index (October) 10am JOLTS Job Openings (September) Profitable: Visa, Chipotle Mexican Grill, First Solar, Caesars Entertainment, Advanced Micro Devices, McDonald’s, Pfizer, Royal Caribbean Group, PayPal, DR Horton, Alphabet Wednesday, October 30 at 8:15 AM ADP Employment Survey (October) 8:30 a.m. GDP First Preliminary (Q3) 8:30 a.m. GDP First Preliminary (Q3) 10 a.m. Pending Home Sales Index (September) 10 a.m. Pending Home Sales Earnings: Microsoft, Meta Platforms, Starbucks, Kraft Heinz, Caterpillar, Eli Lilly, GE Healthcare Technologies, Clorox, Booking Holdings Thursday, October 31 at 8:30am Continuing Unemployment Benefits Filings (10/ 19) 8:30 AM ECI Civilian Workers (Q3) 8:30 AM Initial Jobless Claims (10/26) 8:30 AM Core PCE Deflator (September) 8:30 AM PCE Deflator (September) 8:30 AM Personal Consumption Expenditures (September) 8:30 AM Personal Income (September) 9:45 AM Chicago PMI (October) Earnings: Apple, Amazon, Norwegian Cruise Line Holdings, Uber Technologies, Estée Lauder Corporation, Mastercard, Generac Friday, November 1 8:30 AM Employment Report (October) 9:45 AM S&P PMI Manufacturing Final Value (October) 10 AM Construction Spending (September) 10 AM ISM Manufacturing Industry (October) Earnings: ExxonMobil
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