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Top 5 Things to Watch in Markets in the Week Ahead

EconomyOct 17, 2021 07:48AM ET
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© Reuters

By Noreen Burke

Investing.com -- The first big wave of earnings reports will give investors plenty to digest in the coming week, while U.S data could help cement expectations for the Federal Reserve to begin tapering. Figures on third quarter Chinese economic growth on Monday will show the impact of multiple recent hits to the world’s second largest economy. UK inflation data later in the week could reinforce growing expectations for a rate hike by the Bank of England. Meanwhile, the first bitcoin futures ETF is set to begin trading, propelling the digital currency closer to all-time highs. Here’s what you need to know to start your week.

1. Earnings

Dozens of companies will be reporting in the coming week, including Tesla (NASDAQ:TSLA), Intel (NASDAQ:INTC) and Johnson & Johnson (NYSE:JNJ), as the first major wave of third quarter earnings results gets underway.

On Thursday Netflix (NASDAQ:NFLX) kicks off third quarter reporting for the 'FAANG' group of U.S. tech giants Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Netflix and Google-parent Alphabet (NASDAQ:GOOGL).

The video streaming company said "Squid Game" has become its biggest series launch ever and Bloomberg reported that the megahit will create almost $900 million in value for Netflix.

U.S. stocks were higher on Friday and the Dow posted its largest weekly percentage gain since June, after Goldman Sachs (NYSE:GS) rounded out a strong start to third quarter earnings for the major banks, though investors will stay on the lookout in the coming weeks for signs of impacts from supply chain disruptions and higher costs, especially for energy.

2. U.S. data

The U.S. is to release data on industrial production on Monday followed by reports on building permits and housing starts on Tuesday.

Industrial production is likely to be held back by supply chain problems, but housing data is expected to remain solid, with the recent uptick in mortgage applications pointing to a fresh pickup in activity after a slight slowdown through the spring and summer.

The Fed’s Beige Book is due out on Wednesday and could cement expectations for tapering. Last week’s minutes of the Fed’s September meeting showed that a November announcement is on the cards and tapering could even start later the same month.

3. Chinese GDP

In recent months the Chinese economy has taken a series of blows from the Evergrande-induced property market crisis, outbreaks of the delta variant, an energy crunch, supply bottlenecks and soaring commodity prices.

So, investors will be closely watching Monday's third quarter gross domestic product data, which will be released alongside figures on factory production and retail sales. Economists are expecting growth in the world’s number two economy to have slowed to 5.2% year-on-year, the slowest in a year, from 7.9% in the previous quarter.

China’s real estate sector, a key driver of growth, is reeling from rising defaults, with sales tumbling and construction slowing as Evergrande, once China's top-selling developer, battles against default on more than $300 billion in debts.

4. UK inflation

Data on Wednesday is expected to point to the fastest increase in UK consumer price inflation in nearly nine years in September, with economists forecasting a reading of 3.2% year-over-year.

The report will be keenly watched amid growing expectations for the BoE to hike interest rates before the end of the year to tackle surging inflation, becoming the first major central bank to do so since the start of the coronavirus pandemic.

Surging energy prices and supply-chain bottlenecks mean that the BoE expects inflation to exceed 4% at the end of the year and remain around that level in the first half of 2022.

5. Bitcoin futures ETF

The first U.S.-listed bitcoin futures ETFs are set to launch in the coming week, barring a last-minute objection from the Securities and Exchange Commission.

The ProShares Bitcoin Exchange Traded Fund is scheduled to start trading on the New York Stock Exchange on Tuesday. A day later, the Invesco Bitcoin Strategy ETF, would also be allowed to launch unless the SEC blocks it.

The ETFs will be based on bitcoin futures that already trade on the Chicago Mercantile Exchange rather than the cryptocurrency itself amid regulatory concerns over a potential lack of liquidity and the risk of price manipulation on spot exchanges.

The launch of the ETFs could pave the way for a stream of similar products, potentially fueling a run higher for the world’s largest digital currency which hit peaks of $62,892 on Friday, not far from its all-time highs of $64,778.

--Reuters contributed to this report

Top 5 Things to Watch in Markets in the Week Ahead
 

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Comments (15)
Ronald Warren
Ronald Warren Oct 17, 2021 7:40PM ET
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At some point in the near future, there has to be a moment of truth that brings this market down. Inflation is screaming! I see 20 to 25% increases everywhere I look. I'm a contractor, so I see most of these price increases at Lowe's and Home Depot. My flooring supplier explained to me recently that all companies in the United States were paying $2,000 to secure a shipping carton to move product overseas. The price is now $15,000. All costs are increasing in flooring. By the end of this year, setting materials and grout are increasing by 100%. In addition, president Biden is placing new tariffs on imported flooring that will take place the first of next year. American industries are going to suffer. What about $100 oil and the cost of manufacturing? There are too many negative factors at play. It's just a matter of time.
Thomas Rossi
Thomas Rossi Oct 17, 2021 7:40PM ET
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Nope: earnings.
Nong Nong Nong Nong
Nong Nong Nong Nong Oct 17, 2021 7:40PM ET
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Myanmar 🧍
Todd Gray
Todd Gray Oct 17, 2021 6:55PM ET
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History proves new ETF markets never led an asset market higher. But, in the long term, they do. Plus, it's a futures ETF. If you don't understand contango, and know the ins & outs of advanced futures trading, don't trade it.
Todd Gray
Todd Gray Oct 17, 2021 6:49PM ET
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Goats leading sheep,... with 5 things.
Patrick Aninta
Patrick Aninta Oct 17, 2021 1:37PM ET
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hello
Samuel Olayemi
Samuel Olayemi Oct 17, 2021 1:18PM ET
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Please house i haven't know much about trading can someone's help me either with a video please help
New Jazenevd
New Jazenevd Oct 17, 2021 1:18PM ET
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If you don’t know it, then don’t do it. This can be understood without videos.
Emmanuel Samuel
Emmanuel Samuel Oct 17, 2021 1:18PM ET
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Go get yourself a mentor of your choice and He will teach you but if you are in Nigeria, I can give u assistant if u are ready
Rodney Dangerfield
Rodney Dangerfield Oct 17, 2021 1:18PM ET
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Another sheep come to the slaughter wont somebody help this fellow separate himself from his money he even said please
Meru Pet
Meru Pet Oct 17, 2021 1:18PM ET
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meeeh ?
Macaulay James
Macaulay James Oct 17, 2021 1:18PM ET
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Nigerians everywhere
ASMOT ASMOT
ASMOT ASMOT Oct 17, 2021 11:44AM ET
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shut off the sink
Sok Sothon
Sok Sothon Oct 17, 2021 11:30AM ET
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Walter Kovacs
Walter Kovacs Oct 17, 2021 11:09AM ET
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Is a bitcoin ETF based on a future of an NFT a Dream within a dream within a dream?
ahmad daha
ahmad daha Oct 17, 2021 10:11AM ET
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What's about us30 next move? Up or down
Jack Bquick
Jack Bquick Oct 17, 2021 10:04AM ET
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Every number out of China must be divided by 2. Their communist way is to inflate numbers to create a better image. They are a high risk investment. Avoid.
York Regent
York Regent Oct 17, 2021 10:04AM ET
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That’s a compleyely biased opinion and devoid of any fact.
New Jazenevd
New Jazenevd Oct 17, 2021 10:04AM ET
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Yep, Chinese numbers are not reliable. However, they really buy lot of commodities, oil, iron, copper…. They really buy them,  no matter what they do with them internally. These import numbers can be verified on another side of the transactions. It means investing in commodities, devoured by China, is less risky than investing in Chinese companies.
Steffen vdm
Steffen vdm Oct 17, 2021 10:04AM ET
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And the ongoing good news show coming out of the US is real??? Give me a break
Musa Muhammed aminu
Musa Muhammed aminu Oct 17, 2021 10:03AM ET
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Millennial Metals
Millennial Metals Oct 17, 2021 9:52AM ET
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Total collapse and debt crisis will come out of nowhere very soon
clayton park
clayton park Oct 17, 2021 9:52AM ET
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evergrande = $300 BILLION in debt and can't make $86m in coupon payments rn!
New Jazenevd
New Jazenevd Oct 17, 2021 9:52AM ET
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clayton park  $300B is not big money anymore in this brave trillion-printed world. China will print the needed money if Evergrande goes bk.
Ronald Warren
Ronald Warren Oct 17, 2021 9:52AM ET
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You're absolutely right. Probably on a Monday morning.
JS Samim Roket
JS Samim Roket Oct 17, 2021 9:45AM ET
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New Jazenevd
New Jazenevd Oct 17, 2021 9:12AM ET
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The market is moving higher, because printing press is unstoppable. One can still do some trading, using dips, or just stay quiet and see stock assets growing, better say inflating higher.
jason xx
jason xx Oct 17, 2021 9:10AM ET
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oh please there is no risk of price manipulation on futures? They are all the most manipulated thing ever. The SEC is s c r ew ing GBTC investors and giving away first mover advantage. Thanks SEC  for again proving you are the most corrupt government arm out there.
 
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