As investors gear up for a new week, key economic data, central bank actions, and corporate earnings are set to shape the direction of markets. Here’s what to keep an eye on:
1. U.S. Inflation Data (CPI)
All eyes will be on Thursday’s Consumer Price Index (CPI) data for September, following last Friday’s robust jobs report. The latest inflation figures are anticipated to show continued easing of price pressures, which could influence the Federal Reserve’s future policy decisions. A slower-than-expected rise in prices would likely reinforce expectations for the Fed to maintain a measured pace in its rate-cutting cycle.
Friday’s Producer Price Index (PPI) data will also be in focus, adding more insights into inflation trends. With inflation seemingly on track toward the Fed’s 2% target, the CPI results could either justify the Fed’s recent rate cut or, if inflation surprises to the upside, dampen hopes for further easing.
2. Federal Reserve Meeting Minutes
The Fed will release the minutes from its September meeting on Wednesday, providing a closer look at policymakers’ rationale behind the 50 basis point rate cut and offering clues on the pace of future policy adjustments. Investors will look for any signals indicating whether additional cuts are on the table for November.
Several Fed officials are scheduled to speak throughout the week, including Neel Kashkari, Raphael Bostic, Adriana Kugler, and Lorie Logan, potentially providing additional context for market participants.
3. Earnings Season Kicks Off
Third-quarter earnings season is set to begin, with major financial institutions such as JPMorgan Chase, Wells Fargo, and BlackRock slated to report on Friday. These reports are expected to provide insights into the health of the economy, particularly in terms of loan demand and consumer spending. Investors will watch for any signs that the Fed’s recent rate cuts are filtering through to boost auto sales or other major purchases.
PepsiCo and Delta Air Lines are among other notable companies releasing results this week. With the S&P 500 up 20% year-to-date and trading near record highs, investors are hoping that earnings will justify the current elevated valuations.
4. Volatile Oil Prices
Oil prices surged last week, marking their biggest weekly gains in over a year amid escalating geopolitical tensions in the Middle East. However, further gains may be tempered as the U.S. attempts to discourage broader conflict. The situation remains fluid after Israel’s recent military actions against Iran-backed Hezbollah, which prompted retaliatory missile attacks from Iran.
Brent crude gained over 8% last week, while West Texas Intermediate (WTI) jumped 9.1%. Analysts warn that a prolonged conflict could disrupt Iranian oil production, potentially impacting global supply and adding further volatility to energy markets.
5. Central Bank Moves in New Zealand and Australia
The Reserve Bank of New Zealand (RBNZ) will meet on Wednesday, and some analysts expect a 50 basis point rate cut, following in the Fed’s footsteps. The RBNZ previously surprised markets in August by lowering rates for the first time in over four years, and Governor Adrian Orr hinted at more cuts before year-end.
Meanwhile, the Reserve Bank of Australia (RBA) will release the minutes of its latest meeting on Tuesday. Investors will be looking for any signs of a shift in its monetary stance, as Deputy Governor Andrew Hauser is scheduled to speak the same day.
This week promises to be packed with key events that could steer global markets, making it crucial for investors to stay informed on these developments.
