The Week Ahead (NFLX, TSM, BAC Earnings; Canadian Inflation Data)

Moomoo News Canada joined discussion · Oct 14, 2024 08:36

The Week Ahead (NFLX, TSM, BAC Earnings; Canadian Inflation Data)

The upcoming earnings season may determine the future direction of stocks. The $S&P 500 Index (.SPX.US)$, $Dow Jones Industrial Average (.DJI.US)$ and $S&P/TSX Composite Index (.SPTSX.CA)$ have reached all-time highs, following a robust jobs report last week and some encouraging inflation data this week that boosted investor confidence in equities. Among the names reporting next week are $奈飞(NFLX.US)$,$阿斯麦(ASML.US)$, Investment Banks like $美国银行(BAC.US)$,$花旗集团(C.US)$, $高盛(GS.US)$and of course $台积电(TSM.US)$.

$奈飞(NFLX.US)$is set to release its Q3 2024 earnings report on Thursday, October 17th. As the first among the FAANG stocks to report each quarter, the streaming giant is under close scrutiny. The market anticipates quarterly revenue of $9.77 billion and a net income of $2.23 billion. Earnings per share are expected to be $5.16, a notable increase from $4.88 in Q2. Recently, analysts have raised their expectations for Netflix's EPS estimates, while revenue projections have also seen a slight upward adjustment. However, net income estimates have been slightly revised down by 0.11%.

$高盛(GS.US)$is scheduled to release its earnings on October 15th, as the share price aims to reach new record highs. This announcement follows several banks that reported on Friday to kick off earnings season, with JP Morgan and Wells Fargo surpassing expectations. Analysts anticipate that Goldman Sachs will report earnings per share (EPS) of $7.31 on revenue of $11.79 billion. These results come on the heels of a remarkable 150% increase in profits compared to the same period last year in the second quarter, driven by a surge in its investment banking division. CEO David Solomon remarked that we are in the early stages of a recovery in capital markets and mergers and acquisitions, which bodes well for the investment bank's future prospects.

Canada September CPI data is scheduled to release on Tuesday. Declining energy prices in September likely contributed to a further reduction in Canadian inflation, building on the decrease observed in August when the headline consumer price index (CPI) met the Bank of Canada's 2% target for the first time in over three years.

It is anticipated by RBC that year-over-year headline CPI dropped to 1.8% in September from 2% in August, while the sub-index, which excludes the more volatile food and energy components, remained steady at 2.4%. The Bank of Canada's favored core inflation metrics (CPI trim, median, and 'supercore') are expected to have decreased further on a three-month annualized basis, indicating ongoing easing of price pressures amid a weak economic forecast. The growth of the gross domestic product (GDP) for Q3 appears likely to underperform, despite continued rapid population growth.

In the housing sector, typically more responsive to changes in interest rates than other economic areas, the reaction has been relatively muted so far. Preliminary data from regional real estate boards indicate that activity in Canada's largest markets saw fluctuations in September, with an increase in new listings and inventory exerting downward pressure on prices. A significant rebound in the nationwide resale market is not anticipated in the upcoming week, and prices are expected to stay below those of the previous year.

These developments suggest an expanding negative output gap, greater excess supply in the economy, and increasing disinflationary pressures. Such trends are concerning for the Bank of Canada (BoC), which is wary of potential economic downturns. At a recent forum, Governor Tiff Macklem expressed concerns that recent indicators hint at weaker growth than anticipated, emphasizing the desire to see economic strengthening to achieve a smooth adjustment without inflation persistently falling below the target range.

This context suggests that larger rate cuts than those seen previously may be necessary. The market anticipates the next move by the BoC will involve a significant 50 basis point cut to the overnight rate on October 23.