Geopolitical tensions between Israel and Palestinian militant group Hamas have sent shockwaves through global markets. As uncertainty looms, investors are anxiously awaiting a week of earnings reports and economic data that will shed light on the health of the global economy. Major US companies such as Tesla, Bank of America, and Goldman Sachs are set to report their third-quarter earnings, with expectations of a pickup in profit growth after a slow start to the year.
In addition to earnings reports, economic data from the United States, China, and Britain will provide insights into key indicators of economic growth, wages, and consumer spending. US retail sales for September, in particular, will be closely watched by investors who are eager to gauge the resilience of the consumer and whether the US economy can avoid a hard landing.
Meanwhile, China’s largest private property developer, Country Garden, faces a crucial deadline to meet coupon payments on its nearly $11 billion in offshore debt. This comes as the Chinese real estate sector grapples with a liquidity crisis, with 40% of companies involved in home sales having already defaulted since 2021. The Chinese government has implemented measures to stabilize the sector, but it remains to be seen whether these efforts will be enough to mitigate the ongoing challenges.
In Poland, a high-stakes election is set to take place on Sunday. The outcome of the election will not only shape the country’s domestic policies but also have significant implications for Poland’s relationship with the European Union. The ruling nationalist Law and Justice party (PiS) is expected to win, but without an outright majority, which could lead to a fragile government and impact the country’s currency, bonds, and stock markets.
European banks are also facing challenges as the boost from higher interest rates dwindles and recession risks loom. However, some investors continue to hold onto bank shares, drawn by the attractive dividend yields. Analysts predict that European banks will see adjusted earnings grow by 25% this year, followed by a 6% gain in 2024.
The Bank of England (BoE) is grappling with inflation data that has consistently surprised on the upside, causing uncertainty about its monetary policy decisions. Despite a recent slowdown in inflation, it remains well above the central bank’s 2% target, while economic growth remains lackluster. Employment and inflation data due in the coming week will provide further insight into the UK’s economic trajectory, setting the stage for the BoE’s November meeting.
As the global economy faces numerous challenges and uncertainties, investors will be closely monitoring these events and data releases for signs of stability and growth. The outcomes will have far-reaching implications for markets and economies worldwide.
The article has been compiled by Amanda Cooper, with contributions from financial experts in Tokyo, New York, and London, and edited according to the BBC News style guide.
More detail via Daily Mail Online here… ( Image via Daily Mail Online )