Week ahead: US bank earnings in the spotlight
US earnings season will get into full swing next week, with banking behemoths JP Morgan, Citigroup and Goldman Sachs all slated to report quarterly numbers.
Monday looks set to be fairly quiet on both the macro and corporate fronts. However, Tuesday will bring third-quarter trading statements from BP and Michael Page and full-year results from housebuilder Bellway and YouGov. Full-year results from Premier Inn owner Whitbread, half-year numbers from Bytes Technology and a trading update from Oxford Instruments will also be in focus.
As far as Bellway is concerned, AJ Bell analysts Russ Mould, Danni Hewson and Dan Coatsowrth said: "While the government’s ‘Your First Home’ scheme has given housebuilders’ shares a much-needed boost, the sector faces a tough outlook as mortgage rates continue to remain uncomfortably high.
"Bellway has already guided for underlying profit to be at the bottom end of forecasts, so the focus will shift to the outlook for 2027, and speculation on whether 2026 marked the bottom of the cycle.
"Having completed a big share buyback in 2026 investors will be asking if the modest £50 million buyback announced for 2027 is at risk given the government’s desire to breathe life back into the housing market.
"It seems unlikely the latest first-time buyer scheme will provide the same strong foundations for a sector rally as the original Help to Buy Loan scheme, given mortgage costs are so high."
In the US, quarterly earnings from JP Morgan, Wells Fargo, Citigroup, Goldman Sachs and Johnson & Johnson will be out.
Wednesday will bring a first-quarter assets under management statement from Ashmore and full-year results from Softcat. In the US, quarterly results from Bank of America, Morgan Stanley and BlackRock will be eyed. On the macroeconomic calendar, the Chinese consumer price index and trade figures for September will be released.
In the US, the consumer price index for September will be in the spotlight.
Ipek Ozkardeskaya, senior analyst at Swissquote, said: "Although the most recent jobs data hinted at some weakness in payroll growth and wages, inflation remains the main source of pressure on Federal Reserve (Fed) expectations. Energy inflation is likely to remain elevated - oil and gas prices were volatile during September - but what will matter for Fed expectations is whether inflationary pressure is broadening beyond energy, and whether consumers keep spending despite higher borrowing costs.
"Sticky inflation combined with strong consumption could strengthen the Fed hawks’ hand and keep yields under upward pressure. Softer inflation with resilient spending would be a more comfortable combination for equities. It would not necessarily change expectations that the Fed should hike rates one more time this year to temper inflationary pressures - provided growth and the jobs market remain healthy enough to allow it. But it could reduce the urgency of raising rates and buy the Fed time before its next move. And timing is everything, with another rate hike before the midterm elections likely to be politically sensitive. Oh no..."
On Thursday, investors will eye a first-quarter trading update from homeware retailer Dunelm, Q3 updates from Ladbrokes owner Entain and Jupiter Fund Management, a pre-close trading update from XPS pensions and a third-quarter trading update from paper and packaging group Mondi.
On the macro front, UK August GDP, trade balance and industrial production figures will be eyed, along with eurozone industrial production data for August. Retail sales data for September will be among the highlights in the US.
Friday will see the release of a trading statement from Man Group, eurozone inflation figures for September, and the trade balance for August.
Across the pond, the NY Empire State manufacturing index will be in focus, along with industrial production data for September.