The Market Week Ahead: Oct. 8 – Oct. 12

Oct. 8  –  The biggest news this week (scheduled-in-advance category) is the start of earnings season. Walgreens Boots Alliance (WAG), Delta Air Lines (DAL) and a handful of big banks all report last this week. 

The way last week ended makes some things we’d probably overlook suddenly seem relevant between now and then though. Last week, bond yields rose sharply as investors, suddenly worried about inflation, decided to sell bonds. That eventually carried over to stocks, resulting in the losses we saw from Wednesday afternoon through the end of the week. That makes the Producer Price Index and Consumer Price Index potentially more important than they would be otherwise. A higher-than-expected number in a market that already seems worried about inflation could easily spark another round of selling.

The Treasury is also scheduled to sell $230 billion in bonds at auction this week, which could put more upward pressure on yields. 

Those yields really started to rise after the end of the third quarter, but it seems certain they’ll be discussed when banks report earnings at the end of the week. Banks and other financials had a rough week last week, which runs counter to the normal pattern, where higher rates are good for banks. One possible explanation involves another sector that lost big last week, homebuilders. Higher rates typically means lower selling costs for homes.  If that were to translate to a lower volume of units sold, banks could lose out on loan origination fees. 

Whatever the cause, we’ll get a look at what’s going on inside of JP Morgan (JPM) Wells Fargo (WFC) and Citigroup (C) before the open Friday, with plenty of analysis of both the third quarter, and what’s going on so far in the fourth.

Economic Events this Week

After last week’s move in bonds, this week’s inflation data could spark another round of selling in the debt and equity markets if numbers come in higher than expected. 

  • Wednesday
    • 8:30 a.m. – PPI
  •  Thursday
    • 8:30 a.m. – CPI
    • 11:00 a.m. – EIA Crude Inventories
  • Friday
    • 10:00 a.m. – Univ. of Michigan Consumer Sentiment – Prelim

Earnings Reports this Week

The financials reporting at the end of the week mark the start of third-quarter earnings season. 

Tuesday:

  • Before the bell: HELE

Wednesday:

  • Before the bell: FAST

Thursday: 

  • Before the bell: WBA, DAL, CBSH

Friday:

  • Before the bell: JPM, WFC, C, PNC, FRC

Sector Analysis 

After the end of last week, these lists are longer on the downside.

Strong Sectors past Month

There is only one sector up 5% or more in the last 20 trading days:

  • Oil Services
  • Oil & Gas Exploration
  • Commodities
  • Energy
  • Steel

These sectors are down 5% or more in the last 20 trading days:

  • Cyber Security
  • Volatility
  • Biotechnology
  • Homebuilders
  • Small Caps
  • Internet
  • Retail
  • Regional Banks

Strong sectors past five trading days

These sectors are up  3% or more in the last five trading days:

  • Volatility
  • Agriculture

Weak sectors past five trading days

  • Cyber Security
  • Biotechnology
  • Internet
  • Airlines
  • Medical Devices
  • Robotics
  • Retail
  • Semiconductors
  • Small Caps
  • Solar
  • Consumer Discretionary
  • Nasdaq
  • Technology
  • Homebuilders

Bobby Raines

Bobby Raines

Bobby Raines is the Managing Editor of the Market Intelligence Center. He has degrees in Mass Communications and History from Emory & Henry College. Bobby worked at a mid-sized daily newspaper before making a switch to covering the financial industry full time in the years leading up to the financial crisis. He has been a member of the Fresh Brewed Media team since 2011 and has served as a writer and analyst. You can write to him at braines@marketintelligencecenter.com or follow him on Twitter: @BRatMICenter.

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