Three Things to Watch
- Third-quarter earnings will continue to be the focus of the stock market. Next week’s busy schedule includes widely followed names Apple, Amazon, and Microsoft. Of the 99 S&P 500 members that have reported earnings so far this quarter, 72% have posted a positive earnings surprise, with the aggregate surprise up 4.5%.
- Important readings on consumer attitudes will be released on Tuesday (Conference Board’s reading of Consumer Confidence) and Friday (University of Michigan Consumer Sentiment). Confidence/sentiment has been trending slightly higher in recent months despite weak stocks and high inflation. Friday’s report also includes inflation expectations for both one and five years. To date, longer-term inflation expectations have remained well-anchored with the last reading at 2.9%.
- Elon Musk’s $44 billion Twitter buyout is scheduled to close by Friday. Late last week, Bloomberg reported that the Biden administration is considering investigating potential national security risks posed by the deal.
- The Atlanta Fed calculates a running estimate of real GDP growth using available economic data for the current measured quarter. It is not the official forecast but is a mathematical projection with no subjective adjustments. (For example, it does not account for all of the effects of Covid -19). The latest estimate (updated Oct. 19) for the third quarter is 2.9%. (Source: The Atlanta Fed)
- The weekly national average for a 30-year fixed rate mortgage hit 7.24% last week, the highest in two decades. (Source: Bankrate)
- The average annual return of the S&P 500 during the third year of the Presidential Cycle is 13.5%. The only negative year three of the Presidential Cycle was in 1931. (Source: Seth Golden)