Earnings Season Heats Up as Presidential Election and Fed Rate Meeting Loom
The stock market is gearing up for another busy week, with a slew of earnings reports from top companies across various sectors. The Dow Jones Industrial Average, S&P 500, and Nasdaq are all expected to build on their recent gains, which have seen them rise by 15%, 23%, and 23% respectively so far this year.
A Packed Earnings Calendar
This week’s earnings calendar is packed with big-name companies reporting their quarterly results. On Tuesday, investors will be watching General Electric, General Motors, Lockheed Martin, 3M, Philip Morris, Texas Instruments, and Verizon. Wednesday brings reports from Tesla, IBM, AT&T, Coca-Cola, and Boeing, while Thursday sees Honeywell, UPS, American Airlines, Southwest Airlines, and Northrop Grumman take center stage. Colgate-Palmolive rounds out the week on Friday.
Earnings Growth Expected to Continue
So far, 71 S&P 500 companies have reported their earnings, with an average increase of 4% compared to the same quarter last year. This follows a strong 13% rise in earnings for the second quarter. Analysts expect earnings growth to continue, with a forecast of 5-7% growth for the current quarter and high single-digit growth for the full year.
Sectors to Watch
Information Technology, Communication Services, and Healthcare are expected to be the standout sectors this quarter. These industries have been driving growth and innovation, and investors will be watching closely to see if they can continue to deliver.
Economic Indicators Take Center Stage
In addition to earnings reports, several key economic indicators will be released this week. Existing Home Sales and the Fed Beige Book are due out on Wednesday, followed by New Home Sales on Thursday. Friday brings Durable Goods orders and Consumer Sentiment.
Durable Goods Orders in Focus
Argus Chief Economist Chris Graja has highlighted Durable Goods orders as his “Call of the Week.” Graja expects September Durable Goods orders to fall 4.5% year over year, citing a tough comparison to the same period last year. However, he notes that the Equipment category jumped 9.8% in the second quarter and could be a strong performer again in the third quarter.
Retail Sales Beat Expectations
Last week’s Retail Sales report came in higher than expected, with a 0.4% increase in September. When gas sales and car sales are removed, overall Retail Sales rose 0.7%. Food remains a category where people are spending a disproportionate amount of money, with both Food and Beverage Stores and Food Services seeing significant gains.
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