This Week’s Events: Big Bank Earnings, Inflation Data, and More

This week, traders, analysts, and consumers may want to keep tabs on some of the key economic events and data releases that could shed light on the state of the global economy in the present and possibly the near future. From earnings reports to inflation readings and GDP to Minutes, here are this week’s main economic events:

More Earnings Reports 

Earnings season continues this month with key results from the banking and food and beverage sectors.

On Tuesday, October 10, beverage giant PepsiCo (PEP) is expected to report how it fared over the fiscal quarter that ended on September 2023. The report which can reflect the state of consumer demand and the US economy is expected to be good, according to some analysts. 

The optimistic forecast appears to stem from PepsiCo’s “improved pricing” across all sectors, possible advantages derived from addressing inflationary challenges through effective cost and revenue management strategies, and strength in the company’s global convenient food and beverage departments.

As such, according to the Zacks Consensus Estimate, Q3 revenues are expected to land at $23.4 billion which would be 6.5% above the year-ago quarter’s results. Moreover, quarterly earnings are projected to grow 10.2% from the previous year.

Nonetheless, it is important to keep in mind that PepsiCo and even its rival, Coca-Cola (KO) have faced challenges and consumer demand cutbacks recently due to Walmart’s recent study which analyzed sales patterns using data from drug users. The study focused on appetite-suppressing drugs like Ozempic and how these can affect consumer spending. 

According to Walmart (WMT) US CEO John Furner, Ozempic, and Wegovy, along with other weight loss drugs, may lead to consumer cutbacks on calorie intake. This, as a result, led some analysts to believe that PepsiCo, Coca-Cola, and other food and beverage brands may need to change their products to fit possible new consumer purchasing patterns. Still, despite this gloomy outlook, traders and analysts should bear in mind that the study is still in its early stages and that conclusions are yet to be drawn.

In addition to PepsiCo, some of this week’s most anticipated earnings may be those from the banking sector as big banks like JPMorgan Chase, Wells Fargo, and Citigroup are set to release their quarterly results on Friday, October 13.

These earnings may be interesting, especially in light of the fact that this year has been exceptionally challenging for the banking industry as many big banks and financial institutions went bankrupt and inflation and interest rate hikes took a toll on their shares.

Despite this year’s woes, it seems that the overall analyst consensus is more or less positive for some of these banks. As such, Wells Fargo (WFC) is expected to report Earnings Per Share (EPS) of $1.21 and a revenue of $20.2 billion. If these predictions materialize, EPS would be 42.4% higher YoY while revenue would be 7.4% higher YoY.

As for JPMorgan (JPM), the bank is expected to report higher EPS and revenues. Zacks Consensus expects EPS to come in at $3.85 which would be 23.4% higher YoY and revenues are projected to reach $39.11 billion, reflecting a 19.6% increase. 

On the other hand, Citigroup (C) is predicted to report less optimistic earnings. According to Zacks Consensus Estimate, quarterly EPS is predicted to decline 16% YoY and come in at $1.26 while revenues are expected to be $19.3 billion which is 4.3% higher than the year-ago quarter.  However, whether these predictions will come to fruition remains uncertain. (Source:Yahoo Finance)

Amazon’s "Prime Big Deal Days" Kicks Off 

Another event that could shed light on consumer spending and reflect the health of the economy is Tuesday’s “Prime Big Deal Days” event which will be hosted by Amazon (AMZN), the largest online retailer worldwide. 

The event which will be available in 19 countries from Tuesday to Wednesday provides Amazon’s Prime members with “deals and discounts on popular brands like Peloton, LG, Sony, iRobot, SharkNinja, and Barbie, among others.”

It will be worth keeping track of Amazon’s share price following this event. In addition, it may be interesting to note that this event comes three months after Amazon’s “Prime Day 2023” which was its “single-biggest sales day ever.” (Source:Investopedia)

Inflation Update: PPI, CPI & GDP

It is no secret that inflation has been making the headlines this year in some of the world’s biggest economies, and the US is no exception. As such, this week’s inflation data releases may be worth keeping track of and can provide valuable insight into the health of the world’s biggest economy. 

On Wednesday, the Producer Price Index (PPI) will be released by the US Bureau of Labor Statistics (BLS) and can reflect how inflation is impacting the wholesale and manufacturing sectors. 

Moreover, on Thursday, October 12, the US Consumer Price Index (CPI) will be released and is projected to show a “slight moderation” in September to 0.3% MoM. Still, annual CPI is expected to have risen by 3.8%, possibly driven by high energy prices. Additionally, core prices (excluding volatile energy and food) are also estimated to show a rise from August’s figures.

Besides the US, this week marks an important one for both China and the United Kingdom (UK) as the former’s CPI figures are expected to be released on Friday while the latter’s Gross Domestic Product (GDP) is set to be released on Thursday.

On Thursday, October 12, the UK’s GDP in August is expected to show an expansion of 0.2% MoM compared to July’s 0.5% contraction. As for Friday’s Chinese September CPI figures, the forecast points toward a YoY rise of 0.2% and a stable MoM rate of 0.3%. It is also believed that despite China’s economic challenges, some analysts from ING “expect the inflation to edge slightly to 0.4% YoY as the recent data suggests that the government’s efforts to boost the economy have had some impact.” Traders will have to wait and see what the figures will reveal about the world’s second-largest economy.

FOMC and ECB Minutes Releases 

Lastly, some of the world’s leading Central Banks, the FOMC and the ECB, are scheduled to release the minutes from their monetary policy meetings on Wednesday and Thursday respectively.

During the Fed’s September 19-20 meeting, the US Central Bank kept its rates unchanged at 5.25-5.50% and signaled further hawkish rate hikes in the near future suggesting that inflation may still be high as unemployment rates continue to remain low. 

On the other hand, the ECB did not align with expectations during its latest meeting on September 14 as it hiked rates to 4% marking the highest rise since the euro’s establishment in 1999.  

It remains to be seen whether the release of the minutes will bring forth fresh insights into the conditions of the Eurozone and the US economies.

Conclusion

While the markets can be unpredictable and volatile, this week’s economic releases may provide valuable information as to where the global economy may be heading in the last months of 2023.

Therefore, keeping track of the results and how these may affect the markets can be crucial to your overall understanding of the economy and your trading decisions.