AGL 40.00 Decreased By ▼ -0.16 (-0.4%)
AIRLINK 129.53 Decreased By ▼ -2.20 (-1.67%)
BOP 6.68 Decreased By ▼ -0.01 (-0.15%)
CNERGY 4.63 Increased By ▲ 0.16 (3.58%)
DCL 8.94 Increased By ▲ 0.12 (1.36%)
DFML 41.69 Increased By ▲ 1.08 (2.66%)
DGKC 83.77 Decreased By ▼ -0.31 (-0.37%)
FCCL 32.77 Increased By ▲ 0.43 (1.33%)
FFBL 75.47 Increased By ▲ 6.86 (10%)
FFL 11.47 Increased By ▲ 0.12 (1.06%)
HUBC 110.55 Decreased By ▼ -1.21 (-1.08%)
HUMNL 14.56 Increased By ▲ 0.25 (1.75%)
KEL 5.39 Increased By ▲ 0.17 (3.26%)
KOSM 8.40 Decreased By ▼ -0.58 (-6.46%)
MLCF 39.79 Increased By ▲ 0.36 (0.91%)
NBP 60.29 No Change ▼ 0.00 (0%)
OGDC 199.66 Increased By ▲ 4.72 (2.42%)
PAEL 26.65 Decreased By ▼ -0.04 (-0.15%)
PIBTL 7.66 Increased By ▲ 0.18 (2.41%)
PPL 157.92 Increased By ▲ 2.15 (1.38%)
PRL 26.73 Increased By ▲ 0.05 (0.19%)
PTC 18.46 Increased By ▲ 0.16 (0.87%)
SEARL 82.44 Decreased By ▼ -0.58 (-0.7%)
TELE 8.31 Increased By ▲ 0.08 (0.97%)
TOMCL 34.51 Decreased By ▼ -0.04 (-0.12%)
TPLP 9.06 Increased By ▲ 0.25 (2.84%)
TREET 17.47 Increased By ▲ 0.77 (4.61%)
TRG 61.32 Decreased By ▼ -1.13 (-1.81%)
UNITY 27.43 Decreased By ▼ -0.01 (-0.04%)
WTL 1.38 Increased By ▲ 0.10 (7.81%)
BR100 10,407 Increased By 220 (2.16%)
BR30 31,713 Increased By 377.1 (1.2%)
KSE100 97,328 Increased By 1781.9 (1.86%)
KSE30 30,192 Increased By 614.4 (2.08%)

NEW YORK: The health of the US consumer moves into the spotlight next week, with investors watching corporate earnings reports and retail sales data for further confirmation of the economic resilience that has boosted equity markets this month.

As earnings season kicks off, stocks are on a roll. The benchmark S&P 500 is set to post its fifth straight weekly gain and is hovering near a fresh record high after rising over 21% this year.

Driving the gains is a string of encouraging economic data that have all but dispelled the slowdown fears that rocked markets over the summer.

Among these was a blowout jobs report earlier this month, the latest sign that the economy is maintaining solid growth as the Federal Reserve cuts interest rates - a historically potent combination for stock market gains.

“For the most part, the majority of the economic data stream has been positive,” said Art Hogan, chief market strategist at B Riley Wealth. “Hopefully that gets confirmation with some of the more consumer-facing companies that are reporting next week.”

Earnings from American Express, Netflix, United Airlines, Procter & Gamble and several major banks will give a broad view of consumer spending, which accounts for more than two-thirds of US economic activity. Retail sales data is expected on Oct. 17.

Shares of JPMorgan Chase and Wells Fargo jumped as earnings season got into gear on Friday, after both lenders surpassed estimates.

Expectations have firmed that the economy will avoid a downturn despite a long period of elevated interest rates.

Goldman Sachs, for example, lowered the odds of a US recession in the next 12 months by five percentage points to 15% following the employment data.

Robust data has supported that view. In addition to jobs, reports on consumer prices and the services sector suggest that fears of a rapidly weakening economy - prompted by disappointing labor market reports in August and September - were overblown.

The Citigroup Economic Surprise Index, which measures how economic data stacks up versus expectations, turned positive this month after being negative since the start of May.

Still, the consumer-spending environment has grown “murkier” following layoffs at financial services and technology companies in recent months, back-to-back hurricanes in the Southeast and a brief dockworkers strike, said Kevin Gordon, senior investment strategist at Charles Schwab, raising the stakes for data and company reports to provide clarity.

More insight will come from additional banks reporting in the coming days, including Bank of America and Citigroup on Tuesday.

American Express’ results will offer a read on more high-end consumer spending, said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

At the other end of the income spectrum, investors said they were focusing on how less affluent consumers were grappling with the rise in prices over the past few years.

Brian Jacobsen, chief economist at Annex Wealth Management in Milwaukee, said he will be scrutinizing Netflix’s results – specifically whether the streaming service is adding or losing customers and at what pace - for insight into how lower-income consumers are reprioritizing spending.

Companies will need to top expectations for profit growth in their quarterly reports in order to support the stock market’s valuation, which stands well above its historical average.

Comments

Comments are closed.