Market Insights for the Week Ahead
This week is packed with significant events that could impact market volatility and investor sentiment. From earnings reports to the US presidential election and Federal Reserve rate decision, there is no shortage of critical developments to monitor.
Earnings Update
The third quarter of 2024 earnings season kicked off with a mix of results from major tech giants. While Alphabet impressed with strong performance driven by AI investments and cloud business growth, Meta and Microsoft faced challenges with user growth and revenue guidance, respectively.
Apple’s results were mostly positive, but a one-time tax charge impacted net income. However, Amazon closed the week on a high note, surpassing expectations and highlighting the success of AI investments and revenue growth in key sectors.
Consumer-facing industries also showed promise, with McDonald’s and Shake Shack reporting sales rebounds, while Chipotle missed revenue estimates.
Overall, with over 70% of S&P 500 companies reporting, the year-over-year growth rate stands at 5.1%, signaling a fifth consecutive quarter of growth.
Solid Economic Data Supports Soft Landing Scenario
Recent economic data continues to support the narrative of a soft landing. Key indicators such as consumer confidence, job growth, and GDP growth for the third quarter demonstrate a resilient economy.
Despite strong economic performance and stable inflation, the Federal Reserve is expected to lower rates this week. The probability of a 25bp decline is currently at 94%, according to CME Group’s FedWatch tool.
However, a slight setback was seen in October’s job report, with only 12,000 jobs added, attributed to external factors such as strikes and natural disasters.
Outlier Earnings Dates This Week
Thirteen S&P 500 companies have confirmed outlier earnings dates for this week, indicating potential negative news. Companies such as Williams Companies, APA Corp, and Halliburton have pushed their reporting dates later than usual, raising concerns among investors.
Energy Outliers
Energy companies are expected to be the weakest performers this earnings season, with significant declines in earnings and revenue growth. Oil prices have also seen a decline, impacting the sector’s overall performance.
Williams Companies and APA Corporation are among the energy outliers this week, reporting earnings later than historical trends, signaling potential challenges for the sector.
Analysis and Implications
The ongoing earnings season provides valuable insights into the performance of key sectors and individual companies, influencing investor decisions and market trends. Positive results from tech companies and consumer-facing industries indicate resilience in the economy, while challenges in the energy sector highlight broader market trends.
Economic indicators support the narrative of a soft landing, with the Federal Reserve expected to respond with a rate cut. However, uncertainties remain, as seen in the job market data and outlier earnings dates, signaling potential risks for investors.
Understanding these developments and their implications is crucial for investors to make informed decisions and navigate market volatility effectively. By staying informed and monitoring key events, investors can position themselves strategically for potential opportunities and risks in the market.
Company Confirmed Report Date: Thursday, November 7, BMO
Projected Report Date (based on historical data): Tuesday, October 22, BMO
DateBreaks Factor: -3*
Get ready, investors! Halliburton Company is set to release its highly anticipated Q3 2024 results on Thursday, November 7, shaking up the financial world with a report date that is more than two weeks later than expected. This unprecedented delay marks a significant shift for HAL, breaking records by reporting in the 45th Week of the Year (WOY) when they typically announce their results in the 43rd WOY. This departure from their traditional Tuesday reporting trend has investors on the edge of their seats, eagerly awaiting the latest insights and numbers.
On Deck This Week
This week signals the second peak week of earnings season, with a staggering 3,700 global companies gearing up to unveil their financial performance.
Source: Wall Street Horizon
Q3 Earnings Wave
As we dive deeper into this earnings season, the peak weeks fall between October 28 – November 15, with each week expected to witness over 2,000 reports flooding in. November 7 is projected to be the busiest day, with a whopping 1,448 companies anticipated to release their results. Currently, 81% of companies have confirmed their earnings date within our universe of 11,000+ global names, with 33% already reporting actual results. The remaining dates are estimated based on historical reporting data, setting the stage for an exciting and eventful earnings season.
Source: Wall Street Horizon