Investing.com -- Geopolitical tensions remain to the fore, while earnings and U.S. retail sales data will give an insight into the health of the consumer. Federal Reserve Chairman Jerome Powell is to speak while economic data out of China and the U.K. will be closely watched. Here’s what you need to know to start your week.
Earnings season picks up
Third quarter earnings season picks up steam, with several major U.S. companies due to report results in a season expected to show an improvement in profit growth after a tepid first half.
Tesla (NASDAQ:TSLA) kicks off earnings for the megacaps after the close on Wednesday. These companies' shares have been central drivers of the rally in equity markets so far this year.
Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) are both set to report ahead of the open on Tuesday and several regional banks are also to report during the coming week.
On Friday, JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C) reported quarterly profits that outstripped analysts' estimates boosted by higher interest rates.
Other big names include healthcare giant Johnson & Johnson (NYSE:JNJ), reporting ahead of Tuesday’s market open, consumer products giant Procter & Gamble (NYSE:PG) ahead of Wednesday’s open, Netflix (NASDAQ:NFLX) after Wednesday’s close and Philip Morris (NYSE:PM) ahead of the open on Thursday.
U.S. data; Fedspeak
Aside from earnings, U.S. retail sales figures for September, due on Tuesday, will give investors insight into the strength of consumer spending, which drives around two-thirds of the economy.
Economists are expecting retail sales to have risen 0.2% last month. A stronger-than-expected reading could stir fears of a rebound in inflation and add to the view that the Federal Reserve will need to keep rates higher for longer.
Market watchers will be closely watching comments by Fed Chair Jerome Powell on Thursday when he addresses the Economic Club of New York.
Several regional Fed presidents are also due to make appearances during the week including Patrick Harker, Thomas Barkin, Neel Kashkari, Loretta Mester and Lorie Logan. Fed Governors Lisa Cook and Christopher Waller are also due to make speeches.
Oil volatility
Oil prices surged almost 6% on Friday, with Brent posting its biggest weekly gain since February, as investors priced in the possibility that the conflict in the Middle East could widen as Israel began ground raids inside the Gaza Strip.
The conflict in the Middle East has had little impact on global oil and gas supplies, and Israel is not a big producer. Investors and market observers, however, are assessing how it could escalate and what it might mean for supplies from nearby countries in the world's top oil producing region.
Also pushing prices higher was the U.S. move on Thursday to impose the first sanctions on owners of tankers carrying Russian oil priced above the Group of Seven's price cap of $60 a barrel, an effort to close loopholes in the mechanism designed to punish Moscow for its invasion of Ukraine.
Russia is the world's second-largest oil producer and a major exporter, and the tighter U.S. scrutiny of its shipments could curtail supply.
China data
Market watchers will be looking to a flurry of economic data out of China on Wednesday for indications that the uneven recovery in the world's second largest economy is stabilizing, as questions remain over the impact of the crisis in the country's property sector and how much additional stimulus Beijing may still need to roll out.
Economists are expecting data on gross domestic product to point to a modest pick-up of 4.4% year-over-year, still below Beijing’s annual growth target of about 5%.
There have been reports the government is looking to increase its budget deficit to meet this year's 5% growth target.
Separate reports on industrial production, retail sales and unemployment are expected to point to slight improvements.
U.K. data
The U.K. is to release its latest employment report on Tuesday followed a day later by inflation figures for September, which will be the final such reports ahead of the Bank of England’s upcoming November meeting.
U.K. inflation has come in above expectations and ahead of BoE forecasts for most of the year before slowing more than expected in August, wrongfooting markets. That said, it’s still well above the BoE’s 2% target.
Meanwhile, the last jobs report indicated that the U.K. labor market was starting to cool, but wage growth remained hot.
Last month the BoE narrowly voted to keep rates on hold for the first time in almost two years, raising the prospect that peak rates have been reached, but indicated that it stands ready to take further action to rein in inflation if needed.
--Reuters contributed to this report