14.10.25 - Focus on Earnings

The third-quarter earnings season begins this week, traditionally led by the US banking sector. Major players like JPMorgan, Wells Fargo, Citigroup, and Goldman Sachs will release their results on Tuesday, followed by Bank of America and Morgan Stanley on Wednesday.

Markets: investors nervous taking some profit or staying on the sidelines

• Global equities most trading negative

• Gold with new all-time high over night

• Bond yields falling broadly

My View: Overall, it’s a rare sight in recent weeks, investors showing signs of nervousness at these lofty market levels, just as the first earnings reports are about to roll in. After the latest rout over the weekend, they seem to be suddenly caught by renewed uncertainty, shifting from aggressive buyers to a more cautious, wait-and-see stance, even with some profit taking.

These first reports could set the tone for market sentiment. The ongoing US government shutdown is expected to delay key macroeconomic data releases, including this week’s inflation figures, leaving investors without crucial guidance from the Fed’s usual data points.
As a result, corporate earnings and even more important, the forward guidance from management, will take center stage.

This shift in focus could trigger significant market reactions: disappointing numbers or guidance might lead to sharp sell-offs in the stocks or even sector, while stronger-than-expected results could ignite another wave of optimism.
For now, markets are in a wait-and-see mode, but volatility could return quickly once the first big numbers hit the screens.

Become a member to access more valuable market updates like this