What To Expect in the Markets Next Week

Markets are gearing up for an eventful week of corporate earnings. We’ll get reports from big tech companies including Microsoft, Meta Platforms, Amazon, and Google-parent Alphabet. Other prominent companies such as Visa, Mastercard, Verizon, Boeing, GE, Ford, General Motors, Spotify, Snap, IBM, Intel, ExxonMobil, and Chevron will also report earnings.

We’ll get the advance estimate for third-quarter gross domestic product (GDP) on Thursday, along with the Personal Consumption Expenditures (PCE) Price Index—the Fed’s preferred inflation gauge—on Friday. The latest updates on the housing market will include new and pending home sales for September.

Week of Oct. 23:

Monday, Oct. 23

• Cadence Design Systems Inc. (CDNS), Brown & Brown Inc. (BRO), Alexandria Real Estate Equities (ARE), and W.R. Berkley Corp. (WRB) report earnings
• Chicago Fed National Activity Index (September)

Tuesday, Oct. 24

• Microsoft (MSFT), Alphabet Inc. (GOOGL; GOOG), Visa (V), The Coca-Cola Company (KO), Novartis (NVS), Texas Instruments (TXN), Verizon Communications (VZ), General Electric (GE), Barclays PLC (BCS), 3M Company (MMM), General Motors (GM), Spotify Technologies (SPOT), and Snap Inc. (SNAP) report earnings
• Richmond Fed Manufacturing Index (October)

Wednesday, Oct. 25

• Meta Platforms (META), Thermo Fisher Scientific (TMO), T-Mobile US (TMUS), IBM (IBM), Boeing (BA), Automatic Data Processing Inc. (ADP), CME Group (CME), Equinix (EQIX), General Dynamics (GD), Banco Santander (SAN), Moody’s Corporation (MCO), O’Reilly Automotive (ORLY), and Hess Corp. (HES) report earnings
• New Home Sales (September)

Thursday, Oct. 26

• Amazon (AMZN), Mastercard (MA), Merck & Company (MRK), Comcast Corp. (CMCSA), Linde PLC (LIN), TotalEnergies (TTE), Intel Corporation (INTC), United Parcel Service (UPS), Honeywell International (HON), Bristol-Myers Squibb (BMY), Anheuser Busch (BUD), Chipotle (CMG), and Ford Motor Company (F) report earnings
• U.S. Gross Domestic Product – Advance Estimate (Q3 2023)
• Durable Goods Orders (September)
• Retail Inventories (September)
• Wholesale Inventories (September)
• Pending Home Sales (September)
• Kansas City Manufacturing Index (October)

Friday, Oct. 27

• ExxonMobil (XOM), Chevron (CVX), AbbVie (ABBV), Sanofi (SNY), Equinor (EQNR), Charter Communications (CHTR), Aon PLC (AON), Colgate-Palmolive (CL), Phillips 66 (PSX), Xcel Energy Inc. (XEL), and T. Rowe Price Group (TROW) report earnings
• Personal Consumption Expenditures (PCE) Price Index (September)
• Personal Income and Spending (September)
• Michigan Consumer Sentiment Index – Final Reading (October)

Big Tech Earnings

Markets are gearing up for a busy week of corporate earnings, and the spotlight could shine on big tech companies.

Microsoft and Google-parent Alphabet will report their earnings on Tuesday, while Meta Platforms and Amazon will follow on Wednesday and Thursday, respectively. Investors can also expect earnings from many other prominent companies, including Visa, Mastercard, Texas Instruments, the Coca-Cola Company, Spotify, Snap, IBM, Boeing, GE, Ford, General Motors, UPS, ExxonMobil, and Chevron, among others.

As of Friday, 17% of S&P 500 companies had reported earnings for the latest quarter. Of these, 73% reported EPS above consensus estimates, while 66% reported high-than-expected revenue, according to research from FactSet. On average, S&P 500 companies are projected to post an annual earnings decline of 0.4%, which would mark the fourth straight quarter of year-over-year earnings declines.

Third-Quarter GDP

On Thursday, the Bureau of Economic Analysis (BEA) will issue the advance estimate for third-quarter U.S. gross domestic product (GDP), a measure of the value of goods and services produced in a nation’s economy.

GDP grew 2.2% and 2.1% in the first two quarters of 2023, respectively. The U.S. economy remains resilient despite the Federal Reserve’s interest rate hikes, which are designed to cool the economy and inflation by making borrowing more expensive.

The Fed’s Preferred Inflation Gauge

On Friday, the Bureau of Economic Analysis will release the Personal Consumption Expenditures (PCE) Price Index for September, the Fed’s preferred inflation gauge.

PCE prices are expected to have risen 0.35% last month, according to estimates from the Cleveland Federal Reserve Bank.

Core prices, which exclude volatile food and energy costs, likely rose 0.29% from August. The core PCE Price Index, which Fed officials consider the most accurate indicator of consumer prices, was likely up 3.7% from a year ago, decelerating from 3.9% in August and inching closer to the central bank’s 2% target.