It’s the start of a new trading week after the US Jobs data fell short of the Fed expectations, as the US earnings season and US CPI data set the week in motion.
Big banks such as JPMorgan, Wells Fargo, and Citi Group will lead the earning reports. Analysts estimate that the average growth rate for the S&P500 companies will be around the 2.4% mark, which would be the lowest since Q3 2020. It is interesting to note that the earnings growth rate is like during the Covid Pandemic.
Focusing on last week’s jobs data, the Non-Farm Payrolls have given the federal reserve undue pressure. The Job economy in the US is currently robust, which may not work well with the current high inflation rates in the US. The US added 288.000 jobs which is a number that was larger than expected; in terms of the unemployment rate, this figure dropped from 3.7% to 3.5%.
Another factor to look out for outside of the Q3 earning season is the inflation (CPI) report expected later in the week. It is estimated that inflation would drop to 8.1% y/y in September from 8.3%. The reduction in CPI expectations can be attributed to the interest rate hikes affecting the economy.