A host of Fed officials are scheduled to speak at various events that will undoubtedly keep the debate going about next month’s FOMC interest-rate decision. The economic data following the latest half-point cut has raised questions about whether the rate-setting panel has been too optimistic over inflation in the US.
Staying with central banks, the Bank of Indonesia is expected to cut interest rates again following last month’s surprise quarter-point reduction. In September, BI said its decision was consistent with forecasts of low inflation, a stable rupiah and a need to support economic growth.
Meanwhile, the European Central Bank is also expected to cut interest rates. Inflation in the eurozone is below the bank’s target of 2%. Its attention has now turned to supporting economic growth.
A bunch of countries will report third-quarter economic growth numbers. Singapore’s economy is expected to have grown 2.5%, whilst China’s economy probably only grew 4.5%. Malaysia’s economy is forecast to have expanded 4.9% in the third quarter.
Corporate Events
The bank earnings season continues apace with quarterly results from Bank of America (NYSE: BAC), Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS). Close attention could be paid to Bank of America’s performance in the third quarter, given that Warren Buffett has reduced his stake in the bank. Was Buffett’s decision purely about portfolio management or does he believe, as the market does, that both revenue and earnings could be lower?
A pair of consumer titans, namely, Johnson & Johnson (NYSEM JNJ) and Procter & Gamble (NYSE: PG) could provide some insights into global spending patterns. P&G is expected to post a modest increase in earnings, whilst revenue could be flat in the first quarter, as households push back on price increases. Meanwhile, J&J’s performance could hinge on its MedTech division that drives most of the company’s growth. Despite challenges that include currency headwinds and stiff competition, J&J is still expected to announce higher revenue and earnings.
Staying with healthcare, Abbott Laboratories (NYSE: ABT) is expected to deliver higher revenue and earnings for the third quarter. Its performance could be driven by improved sales of its diabetes monitor FreeStyle Libre. Additionally, in June, the US FDA has approved its Libre Rio and Lingo glucose monitors for over-the-counter sales that has found a use in weight-loss control.
Netflix (Nasdaq: NFLX) will be the first of the six FAANGS to report earnings. The streaming giant is forecast to deliver strong growth in both earnings and revenue for the third. Look out for news of new content that can be a key driver of subscriber numbers. Also listen out for a possible rise in subscription prices.
Ahead of its third-quarter earnings report, Taiwan Semiconductor Manufacturing (NYSE: TSM) said revenue between July and September jumped 36.5%. The strong revenue growth coupled with a healthy gross margin and continued demand for A.I. chips could once again boost TSMC’s bottom line.
ParkwayLife REIT (SGX: C2PU) will report third-quarter results. In July, the hospital and nursing-home landlord announced a 3.5% rise in first-half distribution per unit. But revenue fell 2.7% because of the depreciation of the Japanese yen. The owner of Gleneagles hospital said it has put in place Japanese yen forward income hedges until the first quarter of 2029.
Other companies with results include Japan’s retailing giant, Takashimiya (NYSE: TKSHF) and casino operator Las Vegas Sands (NYSE: LVS). In the telecom space tower owner Crown Castle (NYSE: CCI) and Nokia (NYSE: NOK) will report quarterly earnings.
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Disclosure: Abbott, ParkwayLife REIT and Crown Castle are components of DKIP’s ACP, KIP portfolios.
