Interest-rate watchers will get a look at some key economic numbers ahead of the Fed meeting the following week. So, the stock market could get a little choppy.
First up will be the Jobs Opening and Labour Turnover Statistics. A strong JOLTs number – anything above eight million – could put the cat amongst the pigeons. It could suggest that the US labour is healthier than the market thinks, which could mean the Fed could stand pat on interest rates.
There is also an opportunity to look at how quickly the US economy grew in the third quarter. The advanced GDP could have accelerated from 3% in the second quarter. It could bring into question why the US Fed would need to cut rates.
The latest Personal Consumption and Expenditure Price index will also be on tap. This is the preferred inflation gauge for the Fed, and it could have fallen from 2.2% in August to 2.1% in September. That could mean the Fed could consider a rate cut.
In China, the Standing Committee of the National People’s Congress will convene at the end of the week. On the agenda could be a report on how state-owned assets should be managed.
The Bank of Japan will announce its latest interest-rate decision. The Bank’s governor, Kazuo Ueda, has already signalled that he is not in a hurry to adjust monetary policy. So, the key short-term rate could be unchanged at 0.25%.
Corporate Events
There will be no let-up on the corporate earnings front with a bevy of Mag 7 set to report. They include Alphabet (Nasdaq: GOOG), Microsoft (Nasdaq: MSFT), Apple (Nasdaq: AAPL), Amazon (Nasdaq: AMZN) and Meta (Nasdaq: META). Investors may want to find out just how much these companies have spent on A.I., and has there been signs of a return on investment.
The mega-techs account for around a fifth of S&P500 earnings. So, they could have an outsized impact on the performance of the US market. Thankfully, they are expected to announce mid-teen increases in both revenue and earnings. But will that be enough for the market?
Advanced Micro Devices (Nasdaq: AMD) is also set to report. It operates on two main fronts. They are bread-and-butter chips for computers and faster processing chips for A.I in data centres. Currently, AMD is still a distant second to the market leader. But it hopes to narrow the gap with its new A.I. processor that is on track to ship next year.
Staying with chips, Intel (Nasdaq: INTC) is expected to update the market on its progress in the A.I. personal computer space. It has already announced an aggressive cost-cutting plan that includes reducing headcount by 15%.
On the pharmaceutical front, there are quarterly reports from Amgen (Nasdaq: AMGN), Eli Lilly (NYSE: LLY), and Bristol Meyer Squibb (NYSE: BMY). Both Eli Lilly and Amgen are involved in the weight-loss arena. So, their progress could be keenly watched. Whilst the former already has products on the market, the latter said its experimental obesity drug MariTide could be ready later this year.
Luckin Coffee (NYSE: LKNCY) and Starbucks (Nasdaq: SBUX) will go head-to-head when both coffee chains are pencilled in for quarter results. Luckin appears to be growing from strength to strength, whilst Starbucks seems to be struggling both in its home market and also abroad.
Do coffee sales really boil down to the price of a cup of cappuccino or is service still a vital ingredient? Recently, Starbucks suspended its guidance for 2025 after announcing a sharp drop in same-store revenue. Could incoming CEO Brian Niccol be ready to pour its stale coffee down the plug hole and make a fresh brew?
Other companies with results include MasterCard (NYSE: MA) and Visa (NYSE: V). The insights from the two payment processors about the spending patterns of global households could be priceless. Staying with consumers, Kraft Heinz (NYSE: KHC) could post a decline in quarterly revenue as inflation continues to take a bite out of household budgets.
Turning from what we put in mouths to what we put on our feet, Adidas (NYSE: ADDYY) hiked its guidance for the full year after announcing strong first-half numbers in July. The sneaker maker has been under a cloud after breaking ties with rapper Kanye West. But its profit could be heading North.
Closer to home, results are expected from hospital landlord First REIT (SGX: AW9U) and China-focussed property owned CapitaLand China Trust (SGX: AU8U). Across the causeway, there are results from British American Tobacco (Malaysia) (KLSE: 4162), Bursa Malaysia (KLSE: 1818) and Carlsberg Malaysia (KLSE: 2836).
And finally, did you know that Leonard Lauder, the former chairman Estée Lauder (NYSE: EL) was responsible for originating the Lipstick Index. He claimed that when economic conditions are tough, lipstick sales would rise because it was seen as an affordable luxury. We’ll find out just how true that is when the cosmetic company reports quarterly results.
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Disclosure: Microsoft, Apple, Starbucks, MasterCard, Visa, First REIT, CapitaLand China Trust, BAT Malaysia, Bursa Malaysia and Carlsberg Malaysia are constituents of the DKIP group of portfolios.
