This is one of those weeks when investors and markets will get buffeted on all sides with information.
So, it is quite possible markets will do a lot of gyrating. The week includes:
- Major earnings reports. These include results of Verizon Communications (Oct. 26), Visa, Coca-Cola and Boeing (Oct. 27), Google parent Alphabet and Microsoft (Oct. 28), Amazon, Intel and Eli Lilly (Oct. 29) and Exxon Mobil and Chevron (Oct. 30)
- The Federal Reserve will announce Oct. 28 if they’ll change interest rates.
- Important economic reports are due, including new-home sales and consumer confidence on Oct. 27, and consumer inflation on Oct. 29.
The Fed decision and the earnings are the big events of the week.
Most Fed watchers see the central bank leaving its key lending rate at 3.75% to 4%, despite Chairman Kevin Warsh’s concerns about stubborn inflation. But a rate increase is expected at its December meeting.
That’s not great news for home buyers, who have seen mortgage rates hit their highest levels since the fall of 2023.
Solid tech, astonishing oil earnings
The earnings should be solid, if only because the tech giants are so big that it’s hard to dislodge them and their plans to invest billions in new data centers. The one worry in all that spending is that the business they generate may not support all the investment.
Consulting firm Gartner thinks that more than $3.5 trillion of AI infrastructure spending could be exposed to impairment — meaning it would have to be written down — by the end of 2030 if AI providers keep spending at their current pace. Further out, the firm says more than $4 trillion in asset value could face write-down risk through 2032.
Or one could see data center developers start to consolidate to survive, John Lovelock, who wrote the Gartner report, told CNBC.
But the oil earnings? They may take your breath away.
Exxon Mobil is expected to report $4.03 a share, up 114% from a year ago with revenue jumping 27% to $106 billion, according to StockAnalysis.com.
Chevron’s earnings may soar from $1.85 to $4.86 a share, with revenue jumping 33% to $61.7 billion.
But remember: Crude oil is up nearly 80% this year, thanks to the U.S.-Israeli war against Iran.
More markets, tech and Fed
- Gold prices break $4,000 as investors brace for crucial test
- UBS explains how looming Fed rate hike could impact your investments
- Meta wants users to pay $249 to put AI on their face
A market that is watching nervously
Put it all together, and you have a stock market that changed little last week. But investors were mostly on edge. And needing and hoping all those earnings coming this week to deliver.
The Standard & Poor’s 500 and the Nasdaq Composite and Nasdaq-100 indexes fell 0.5% to 0.8% on the week. The Dow Jones Industrial Average rose 0.4%. But futures trading on Oct. 25 suggest a modestly positive open.
Interest rates fell a little, but only a little. Mortgage News Daily’s daily report showed the 30-year mortgage rate at about 7.3%, down from its 7.61% peak on Oct. 5. The 10-year Treasury yield was at 5% on Oct. 23 and has been above 5% for 21 of the last 22 sessions.
So, if you’re an interested investor, best to invoke (and paraphrase slightly) the late Bette Davis’s great line from the film, “All About Eve:” Fasten your seatbelts, it may be a bumpy week.
Related: Bank of America warns of 2027 stock market risk few expect