Major international financial events this week include: US mid-term elections are also on the way, US and China Consumer Price Index (CPI) reports for October are about to be released, and several officials Federal Reserve speeches delivered one after the other. At the same time, the US stock market earnings season continues, Disney, Occidental Petroleum (OXY-US), Nano-Micro semiconductor ()NVTS-USA), Rivian and NIO will announce their financial reports for the final quarter, and the market will pay attention to the outlook published by each company. In addition, the UK will also announce the third quarter gross domestic product (GDP).
Trading Notes This Week (1107-1111)
1. US and China Inflation Reports
On Thursday (10) the US will release its October Consumer Price Index (CPI) report.The market estimates that CPI will rise 8% year-on-year and the growth rate will slow from the previous value of 8, 2 However, the increase in CPI for the month is estimated to be 0.7% more than 0.4% from the previous value, which means that the market believes that inflation is still rising.
In terms of the core CPI, which has attracted a lot of attention, the market believes that the slowdown in inflation growth is not evident: the core CPI in October is estimated to increase by 6.5% yoy, only a slight slowdown from 6.6% in the preceding month and October core CPI will rise 0.5 %%, down slightly from 0.6% the previous month.
In addition, China to announce CPI report on Wednesday (9th) The market estimates that CPI in October will increase by 2.5% year on year, a slowdown from 2.8% the previous month.
2. Several Fed officials took the baton to speak
This week, a number of officials who voted on the Federal Open Market Committee (FOMC) this year will speak, including Boston Fed Chair Susan Collins, Cleveland Fed Chair Loretta Mester, and Kansas Fed Chair. Susan Collins. President George (Esther George) and New York Fed President Williams (John Williams) (permanent voting member of the FOMC).
After the Fed hiked interest rates in November, officials vehemently said they must continue to raise interest rates to curb inflation, which could push the end point of interest rates to over 5%. ‘next year.
Among them, Richmond Fed Chairman Thomas Barkin said in an interview last Friday (4th) that in order to reduce inflation to the target level, the Fed must take all necessary measures, which could push the rate of the ‘endpoint over 5%.
Minneapolis Fed Chairman Neel Kashkari said the latest job report showed “very strong” hires and could push the endpoint rate “higher”. Separately, Chicago Fed chief Charles Evans expressed a similar view, predicting the Fed’s endpoint rate “will be slightly higher” than the September dot plot forecast.
However, some officials also seemed accommodating. Boston Fed Chair Susan Collins, who voted on the FOMC this year, said that while she advocates raising interest rates to reduce inflation, monetary policy is entering a new phase that may take a little. rate hikes and officials need to be clear on how much higher interest rates to control inflation. However, she didn’t rule out the possibility of continuing to raise interest rates by 3 yards (75 basis points).
3. Mid-term elections in the United States
Midterm elections will be held in the United States on Tuesday (8th), and numerous polls show that, hit by inflation, the Republican Party is expected to take a big win in the re-election of Congress and President Biden is expected to face a political stalemate in the second half of his term.
However, Biden is optimistic, pointing out that the Democratic Party will win. “I really feel we have a chance.” On the other hand, House Speaker Nancy Pelosi made her first appearance a week after her husband’s assault. It is imperative that Democrats not only retain both houses of Congress, but also fight to defend democracy.
4. UK GDP
The UK will publish third quarter GDP on Friday (11th), which is expected to shrink by 0.5%. Despite the cost of living crisis, UK GDP grew by 0.2% in the second quarter, avoiding a technical recession over the summer.
However, the UK’s Office for National Statistics (ONS) previously announced that GDP contracted 0.3% in August, mainly due to a sharp decline in the manufacturing sector and a slight contraction in the services sector. , which significantly increased the risk of a GDP recession in the third quarter.
GDP growth in September is expected to grow 1.1% to avoid a contraction in the third quarter, but economists say it is unlikely due to an extra national holiday for the queen’s funeral in September and the previous mourning period. , which has dampened economic activity across the country. Inevitably, the UK may not escape the fate of shrinking economic growth this time around.
5. The earnings season continues
Lyft Passenger Transport Company (LYFT-US) will report third-quarter earnings after market close on Monday, after the company announced a 13% layoff of nearly 700 employees in response to the current challenging economic environment. However, Lyft said the layoff round will not affect its previous third-quarter guidance, which was for revenue of between $ 1.04 billion and $ 1.06 billion, adjusted earnings before interest, taxes, depreciation and amortization ( EBITDA). EBITDA) is estimated at $ 55 million to $ 65 million.
Disney (DIS-USA) will report last quarter earnings after the bell on Tuesday and the market expects Disney + subscribers to grow approximately 38%. Although the economic outlook is still hazy, Disney theme parks have performed well and the market estimates that the division’s revenue will increase by about 39% year-on-year.
The American manufacturer of electric pickup trucks Rivian (RIVN-USA) will announce its latest gains after the market closes on Wednesday and the market estimates that Rivian’s full-year production forecast should hit the target. However, the market believes that investors can turn their attention to the balance of supply and demand in a slowing economy, as the company’s production exceeded deliveries by 17% in the first three quarters of this year. Additionally, Rivian may also continue to burn cash and the market expects its adjusted free cash flow in the third quarter to deteriorate to a negative $ 1.9 billion from a negative $ 1.6 billion in the prior quarter.
Chinese electric car maker NIO will report its latest gains ahead of the opening of US markets on Thursday, despite expectations that interest rates in Chimao will rise to 14.9% from 13% in the previous quarter due to coronavirus restrictions in China. Some analysts pointed out that shipping growth and pricing bode well for NIO’s profit recovery, with sales of the company’s new ET7 sedan and high-priced ES7 SUV helping to increase revenue.
