Weekly house view | Banks to test fabulous earnings momentum
The week in review
This week will deliver key macroeconomic data, including the September US consumer price index report. Fresh US inflation data will provide an important indicator for rate hike expectations ahead of the Federal Open Market Committee’s October meeting.
This week’s US economic data will include the September producer price index report, the US Census Bureau’s retail trade report and the Federal Reserve’s Beige Book. Also, major US banks will kick off the third-quarter earnings season.
US corporate profits reached an all-time high in the second quarter, with pre-tax earnings of USD 4.8 tn.
Geopolitics remained in the headlines last week. President Donald Trump announced a deal whereby Russia would immediately release large quantities of diesel fuel to global markets.
Yemen’s Houthi rebels attacked Saudi Arabia's King Khalid International Airport. Vitol’s chief executive said a shortage of oil tankers is creating a “shipping crisis.”
The White House created a formal committee to investigate Federal Reserve Governor Lisa Cook regarding allegations related to her mortgage filings.
In France, Marine Le Pen, the leader of the National Rally Party, proposed to cap the French national debt at half its current levels and require deficit reduction measures.
Quote of the week
“The conditions are not in place now for an intervention by the ECB,” said Emmanuel Moulin, governor of the Banque de France.
Key data
The Institute for Supply Management’s (ISM) prices index registered 72.6% in August, which is the highest since July 2022. Both the ISM’s new orders index and employment index topped 59.8% and 50.1%, respectively. The University of Michigan’s consumer sentiment index fell to 46.3, marking a third straight monthly decline. Canada’s unemployment rate hit 6.5% after payrolls fell for two consecutive months.
