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LGT Navigator: Kick off to the quarterly earnings season

October 13, 2021

The quarterly results of JPMorgan will kick off the corporate reporting season in the US before stock markets open in New York today. In the meantime, market sentiment remains depressed due to inflation concerns, which have been exacerbated by the recent rise in oil prices. In Washington, the House of Representatives yesterday approved a bill passed by the Senate that temporarily raises the government's borrowing limit to, postponing the risk of default until early December.

Kick off to the quarterly earnings season

In New York, stock indexes continued to post losses Tuesday ahead of the start of the blue-chip reporting season and amid heightened inflation concerns. The Dow Jones Industrial fell -0.34% to 34'378.34 points and the S&P 500 fell -0.24% to 4'350.65 points. Opened the quarterly reporting period from the major bank JPMorgan. Analysts expect consensus earnings growth of +1.7% to USD 2.97 per share.

Stock investors also remained cautious on the Asian stock exchanges and most of the indices trended in negative territory on Wednesday. One positive sign for global trade is the unabated growth in Chinese exports. In September, exports from the second-largest economy rose +28.1% (in US dollar terms) from a year earlier.

Democrats and Republicans reach agreement on raising the US debt ceiling

The Democrat-controlled House of Representatives agreed yesterday to temporarily raise the government's borrowing limit by USD 480 billion to USD 28.9 trillion, pushing back the deadline to December. As expected, the vote was hard-fought along party lines with 219 votes to 206.

ZEW economic outlook clouds over for fifth month in a row

Investors and analysts regularly surveyed by the Center for European Economic Research (ZEW) were again more pessimistic in the latest October survey. The economic barometer fell from 26.5 points in September to 22.3 (consensus 23.5). Since reaching a twenty-year high in May, sentiment has thus deteriorated continuously. According to the ZEW, the renewed gloom in the economic outlook is mainly due to rising inflation concerns against the backdrop of rising energy costs and bottlenecks in global supply chains.

IMF expects inflation to normalize in 2022

According to the International Monetary Fund (IMF), the sharp rise in inflationary pressures will “normalize” by the middle of next year, i.e. a decline to pre-pandemic levels. The high inflation rate is mainly due to temporary factors such as the disruption of global supply chains or higher energy prices, it said. The IMF advises central banks to weigh inflation risks against stimulus measures. In new economic forecasts unveiled yesterday, the Monetary Fund projects average GDP growth of +5.9% (previously +6.0%) in the current year and +4.9% in 2022. At the same time, inflation is forecast at +2.8% for 2021 (previously +2.4%) and +2.3% (+2.1%) for 2022.

 

Economic Indicators October 13

MEZ Country Indicator Last period
08:00 UK Industrial Production (August, y/y) +3.8%
08:00 GE Consumer Prices (September, y/y) +4.1%
11:00 EZ Industrial Production (August, y/y)  +7.7%
14:30 US Consumer Prices (September, m/m) +0.3%
14:30 US Consumer Prices (September, y/y) +5.3%
14:30 US Core Consumer Prices (September, y/y) +4.0%
20:00 US FOMC Minutes

 

Earnings Calender October 13

Country Company Period
US JPMorgan Chase Q3
US BlackRock Q3
US Delta Airlines Q3

 

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail: lgt.navigator@lgt.com
Source: LGT Bank (Switzerland) Ltd.

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