Equity markets bounced back last week, with all three major indexes rising more than 1.5%, but not without a hefty dose of volatility. The Cboe Volatility Index, or VIX, ended Friday at 20.98, the fourth consecutive day above 20. For comparison, from July through September, the VIX ranged from 14.22 to 20.38, with the latter figure the only close above 20 in those three months.
Rising trade tensions between the U.S. and China as well as fears over an increase in bad loans battered stocks. But that was more than offset by very strong earnings from the big banks and dovish Fedspeak, with Federal Reserve Chairman Jerome Powell once again emphasizing the downside risks to the labor market. Equities were also buoyed by positive outlooks from ASML Holding and Taiwan Semiconductor Manufacturing on their earnings call, keeping the artificial-intelligence trade thriving.
This week roughly 80 S&P 500 companies will report results, with a greater diversity in sectors than just financials, which were the majority last week. Coca-Cola, GE Aerospace, General Motors, and Netflix will release earnings on Tuesday, followed by AT&T, IBM, Tesla on Wednesday. Blackstone, Ford Motor, and T-Mobile US will announce quarterly results on Thursday, and Procter & Gamble ends the week reporting earnings on Friday.
With the government shutdown approaching 20 days, sidelining almost all federal economic data, we get an important inflation report on Friday with the release of the consumer price index from the Bureau of Labor Statistics. S&P Global also releases its Manufacturing and Services Purchasing Managers' Indexes on Friday.
The U.S. Federal Reserve will host an Oct. 21 conference on payments innovation. The conference will explore emerging topics like stablecoin use cases, the intersection of artificial intelligence and payments, and the tokenization of financial products and services, the central bank said.
Monday 10/20
Steel Dynamics and W.R. Berkley announces quarterly results.
Tuesday 10/21
3M, Capital One Financial, Chubb, Coca-Cola, Elevance Health, Equifax, EQT, GE Aerospace, General Motors, Halliburton, Intuitive Surgical, Lockheed Martin, Nasdaq, Netflix, Northrop Grumman, Omnicom Group, Paccar, Philip Morris International, PulteGroup, Quest Diagnostics, RTX, Texas Instruments, and Waste Connections release earnings.
Wednesday 10/22
Amphenol, AT&T, Boston Scientific, CME Group, Crown Castle, FirstEnergy, GE Vernova, Globe Life, Hilton Worldwide Holdings, IBM, Kinder Morgan, Lam Research, Las Vegas Sands, Lennox International, Molina Healthcare, Moody's, Northern Trust, NVR, O'Reilly Automotive, Raymond James Financial, SAP, Teledyne Technologies, Tesla, Thermo Fisher Scientific, United Rentals, and Westinghouse Air Brake Technologies report quarterly results.
Thursday 10/23
Blackstone, CBRE Group, CenterPoint Energy, Deckers Outdoor, Digital Realty Trust, Dover, Dow, First Citizens BancShares, Ford Motor, Hasbro, Honeywell International, Intel, Newmont, Norfolk Southern, PG&E, Pool Corp., Roper Technologies, Southwest Airlines, Textron, T-Mobile US, Tractor Supply, Union Pacific, Valero Energy, and West Pharmaceuticals hold conference calls to discuss earnings.
Friday 10/24
Booz Allen Hamilton Holding, General Dynamics, HCA Healthcare, Illinois Tool Works, Procter & Gamble, and Sanofi announce quarterly results.
The Bureau of Labor Statistics releases the consumer price index for September. Economists forecast a 3.1% year-over-year increase, two-tenths of a percentage point more than in August.
The core CPI, which excludes food and energy prices, is also expected to rise 3.1%, matching the previous figure. Despite the ongoing government shutdown, some BLS employees were recalled to collect data for this inflation report so the Social Security Administration could set its annual cost-of-living adjustment.
S&P Global releases both its Manufacturing and Services Purchasing Managers' Indexes for October. Consensus estimates are for a 51.7 reading for the Manufacturing PMI and a 53.5 for the Services PMI. This compares with readings of 52 and 54.2, respectively, in September.