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Top 5 things to watch in markets in the week ahead

Published 10/29/2023, 06:26 AM
Updated 10/29/2023, 06:09 AM
© Reuters.

Investing.com -- It’s going to be a very busy week for investors, with a Federal Reserve meeting, the latest U.S. jobs report and earnings from technology heavyweight Apple that could set the direction for stocks and bonds the rest of the year. Here’s what you need to know to start your week.

  1. Federal Reserve meeting

Investors will be turning their attention to the Federal Reserve’s policy meeting on Wednesday, eager to hear policymakers' views on the state of the economy and the outlook for interest rates.

Most investors are betting that the Fed is done tightening after Chair Jerome Powell said that rising long-term yields reduce the need for further rate increases, though some believe another hike could come when the central bank meets again in December.

Any indications that the Fed intends to keep rates around current levels through next year could bolster bets on further upside in Treasury yields, whose climb to their highest levels in more 15 years has contributed to a sharp sell-off in the S&P500.

The index has fallen more than 10% since hitting a year-high in late July, though is still up nearly 8% on the year.

  1. Nonfarm payrolls data

The key piece of economic data this week will be Friday’s nonfarm payrolls report for October. After a blockbuster 336,000 jobs were added in September, economists are expecting more moderate jobs growth of 182,000, which is still consistent with a robust labor market.

The unemployment rate is expected to remain at 3.8%, while wage growth is expected to ease to 4% year-on-year, which would mark a post-pandemic period low. This could help bolster the Fed’s view that price pressures are easing and that it doesn't need to raise interest rates any further.

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Ahead of Friday’s data, market participants will be looking at data on third-quarter employment costs on Tuesday for signs that wage growth is moderating.

  1. Earnings

Apple (NASDAQ:AAPL) tops the bill in what is set to be another busy week of U.S. corporate earnings, with the iPhone maker reporting on Thursday.

Shares of Apple, the largest company by market value, have helped drive equity indexes higher this year along with shares of other megacap U.S. tech and growth companies.

Third quarter earnings season has seen disappointments from some Big Tech names, with shares of Alphabet (NASDAQ:GOOGL) and Tesla (NASDAQ:TSLA) slumping after their respective reports. The tech-heavy Nasdaq 100 index is down 11% from its high, though still up nearly 30% on the year.

Consumers' spending habits will also be in the spotlight with other companies set to report include McDonald's (NYSE:MCD) on Monday, Caterpillar (NYSE:CAT) and Pfizer (NYSE:PFE) on Tuesday, Mondelez (NASDAQ:MDLZ) on Wednesday, and Starbucks (NASDAQ:SBUX) and Eli Lilly (NYSE:LLY) on Thursday.

  1. Bank of England

The Bank of England is to hold its penultimate meeting of the year on Thursday, where officials will need to decide whether to resume raising interest rates, having kept them on hold in September after 14 hikes in a row.

Investors are expecting the BoE to keep rates on hold at a 15-year high of 5.25%, while leaving the door open to further hikes if necessary. Policymakers are also expected to reiterate that rates will need to remain around current levels for quite some time to come despite growing signs that the economy is flat-lining.

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The BoE will update its quarterly forecasts which in August showed economic growth of just 0.5% in both 2023 and 2024. Governor Andrew Bailey spoke earlier this month of a "very subdued" outlook.

  1. Eurozone inflation and GDP

The European Central Bank kept interest rates on hold on Thursday after the steepest pace of rate hikes on record and will now be looking ahead to Tuesday’s data on inflation and gross domestic product ahead of its final meeting of the year.

Preliminary data on consumer price inflation is expected to show the headline rate slowing to 3.2% in October, coming closer to the ECB’s 2% target, even if high energy costs continue to pose an upside risk.

GDP data the same day is expected to show that the Eurozone economy contracted by 0.1% in the third quarter, for an annual rate of growth of just 0.2%.

On Thursday, ECB President Christine Lagarde hinted at steady policy ahead and pushed back against rate cut expectations.

--Reuters contributed to this report

Latest comments

336,000 jobs added in September...I guess that's all the companies with help lines hiring, as I NEVER can call a company anymore and get a fluently English speaking person, except for the computerized menu.
Aw, you poor guy. How sad for you.
Hey, gilipollas,  I failed foreign language in the public school system.
Wow! Couldn't even meet that low bar? Poor guy. How sad for you.
👩‍🔧👨‍🔧
Apple result will be worst than goog & tsla
From Warm Camp complaining that the war isn't mentioned in this article. Oct 09, 2023 4:42PM ET "The war in Israel cannot affect the market in big way. It is too small." https://www.investing.com/news/stock-market-news/stock-market-today-dow-up-despite-israelhamas-war-as-fed-members-signal-caution-3194012?comment=40193768
bounce incoming
The markets are in downtrend from couple of weeks, every bullish sentiment/news is sold and shorted to downside. Fed week always bring the change, with market sentiment i think going down 5-10% in next two weeks as well
Talking about specific next week forecast, it seems, Israel has opened ground attack on Hamas bases, while Iran is quiet so far. If this setting stands till Monday opening, then the market can have some recovery, while gold and oil could have some pullback. Of course, the environmental is very stable, and sentiment changes quickly.
Ouch, few typos in preceding message. It meant “the environment is very UNstable”.
Warm Camp: Oct 09, 2023 4:42PM ET: "The war in Israel cannot affect the market in big way. It is too small."
All the headlines have nothing to do with market movements. The market is pre programmed algos designed to take everyone’s money. Headline’s are just an excuse to justify movements. The manipulation on the vix is how the markets are controlled.
can anyone say Ponzi
It's a conspiracy!!!
The market is driven almost exclusively by Middle East war, while the article does not even mention it as a factor. Is this ignorance or arrogance?
 Piglets squeal from sidelines… that’s their only participation in the market.
“Buy when there is blood is blood in the streets.”
 Certainly. I always buy on market’s down days.
FOMC is a non event / FED on hold for long period. No-one cares about EU inflation and GDP ad ECB already flagged long pause as well.... it's all about earnings and geopolitics. CBs are not the main events next week.
I disagree. I believe the market action is dictated almost solely by interest rates. The market is slowly coming to the realization that 5% with no risk is better than the stock market creating selling pressure. I believe we will hit a new 52 week bottom in the first quarter 24.
RepiglaCONS RULE
Lol a non compounding 5% is only better than the stock market if you stink at investing
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