What to Expect in the Week Ahead (CPI Index and Fed Officials' Speaks; Earnings From PepsiCo and JPMorgan)

Moomoo Breakfast US wrote a column · Oct 6 17:41

What to Expect in the Week Ahead (CPI Index and Fed Officials' Speaks; Earnings From PepsiCo and JPMorgan)

Despite a tumultuous week marked by a temporary port strike, fluctuations in Chinese stocks due to stimulus measures, and geopolitical tensions in the Middle East, markets showed resilience, returning to their September closing averages by Friday. After trading hours, major indices reported gains: the S&P 500 (.SPX.US) climbed by 0.90%, the Dow Jones Industrial Average (.DJI.US) increased by 0.81%, and the NASDAQ Composite (.IXIC.US) saw a rise of 1.22%. This turnaround underscores a robust market recovery, navigating through various global economic and political challenges.

Next week's earnings reports from major financial firms, including JP Morgan Chase, Wells Fargo, and BlackRock, are set for October 11. Also, PepsiCo will release its financial earnings in this week.

$PepsiCo (PEP.US)$ is set to report its earnings on Tuesday, with analysts anticipating modest revenue and profit growth amid consumers becoming more value-conscious. Estimates suggest third-quarter revenue will reach $23.83 billion, up from $23.45 billion last year, with net income projected at $3.14 billion, a slight increase from $3.09 billion. CEO Ramon Laguarta noted a shift in consumer shopping habits due to inflation, leading the company to adjust its organic revenue growth outlook for fiscal 2024 to about 4%. Despite growth in international sales, North American sales have been weaker, contributing to a subdued spending environment. PepsiCo shares have dipped 0.6% to $168.53, down approximately 0.8% year-to-date.

$JPMorgan (JPM.US)$ is set to report earnings on October 11, 2024, before market open, for the fiscal quarter ending September 2024. Analysts have a moderately bullish outlook on JPM stock, with a consensus rating of "Moderate Buy," down from "Strong Buy" last month. Among 23 analysts, 15 recommend a "Strong Buy," one a "Moderate Buy," and seven a "Hold." The average price target for JPM is $218.40, suggesting a potential upside of 3.8% from current levels.

US inflation is expected to have moderated at the end of Q3, offering reassurance to the Federal Reserve, which is increasingly focused on protecting the labor market. The consumer price index (CPI) is projected to rise just 0.1% in September, marking the smallest increase in three months, with a year-over-year rise of 2.3%, the slowest since early 2021. The Bureau of Labor Statistics will release this report on Thursday.

Core CPI, excluding food and energy, is anticipated to increase by 0.2% month-over-month and 3.2% year-over-year. Following strong job growth in September, the easing inflation suggests that policymakers may opt for a smaller interest rate cut during their next meeting on November 6-7. Fed Chair Jerome Powell has indicated potential quarter-point rate cuts in the last two meetings of the year.

Bloomberg Economics predicts subdued headline CPI for September, but stronger core inflation consistent with the Fed's 2% target. They believe this report won't significantly affect the Federal Open Market Committee's (FOMC) outlook on inflation trends.

Additionally, Friday's producer price index is expected to reflect milder inflation, while the University of Michigan will release its preliminary consumer sentiment index for October. The Fed's September meeting minutes will also be published on Wednesday, and several Fed officials, including Neel Kashkari and Raphael Bostic, are scheduled to speak in the coming week.