Stocks Near Records Enter Crunch Week: Bank Earnings Kick Off Tuesday, September CPI Wednesday, 10-Year Yield at 5.23%
U.S. equities enter a make-or-break week. With the S&P 500 hovering near record highs, the Oct. 12-16 calendar brings a concentrated test: the big banks kick off third-quarter earnings on Tuesday, September consumer price index (CPI) data lands Wednesday morning, and remarks from the Federal Reserve chair are also on the schedule. Markets are already pricing the data.
Monday, Oct. 12 is Columbus Day: bond markets are closed while equities trade regular hours, 9:30 a.m. to 4:00 p.m. ET. On Tuesday, Oct. 13, JPMorgan Chase, Wells Fargo and Citigroup lead off Q3 earnings season, with net interest income and credit costs in focus — the S&P 500 banks index has fallen about 9% over the past month as Treasury yields climbed.
The main event is Wednesday's September CPI, due at 8:30 a.m. ET. A Reuters poll expects headline CPI to rise 0.6% month-over-month and 3.6% year-over-year, with core CPI — excluding volatile food and energy — up 0.2% month-over-month and 2.5% year-over-year. RBC economists note headline inflation remains largely an oil-price story. To be confident that the Fed doesn't need to respond with monetary policy as aggressively as the market expects, we need to see a clear slowdown in core services inflation, said Michael Reynolds, vice president of investment strategy at Glenmede.
Inflation's path directly shapes the Fed's next move. The FOMC meets Oct. 27-28; traders have reduced bets on another rate hike this month, but a hotter-than-expected CPI could revive them. CPI is a critical indicator, said Olu Sonola, head of U.S. economic research at Fitch Ratings: while the Fed will consider weakened employment signals, the October rate decision will still hinge on inflation.
The backdrop is high U.S. policy rates and sticky inflation: the benchmark 10-year Treasury yield sits near 5.23%, close to a 24-year high, and the Conference Board warns household real income growth is tepid, with consumers cutting discretionary spending. Markets will also watch weekend geopolitics — the geopolitical risk premium in oil after the Riyadh airport attack could set the tone for Monday's open. (Sources: Reuters, Yonhap Infomax, Fitch Ratings)
Published by GSM · USA (original Chinese edition)
Photo: CC BY-SA 4.0（Wikimedia Commons）
