The Week Ahead; 3Q Earnings Season In Focus

aipU.S. stock indexes rallied on Friday following a disappointing jobs report that underperformed estimates and caused investors to pin their hopes on the Federal Reserve delaying a rate hike to December or 2016 due to weaker recent job growth combined with low inflation and global growth concerns.

The Dow Jones climbed 200 points and closed up 1.23 percent while the Nasdaq increased 1.74 percent and the S&P 500 finished up 1.43 percent.

The U.S. dollar is currently trading lower against a basket of currencies in early Asian trading on Monday while the U.S. 10 Year Treasury remains just below 2.00 percent at 1.98, a low that hasn’t been reached since August 24th.

This week investors will shift their attention to third quarter corporate earnings season which gains momentum on Thursday October 8th with Alcoa reporting corporate earnings.

According to Factset, third quarter earnings is estimated to decline -5.1 percent.

Earnings projections for the third quarter of 2015 has been moving lower over the past several months.

On June 30th third quarter earnings was projected to decline -1.0 percent, now it is -5.1 percent.

Factset reports the Energy sector is expected to have that largest year over year decrease in earnings of all ten sectors, while the Telecom service and Consumer discretionary sectors are predicted to report that largest earnings growth of all ten sectors for the quarter.

The plunging price of oil and commodities has taken a toll on sales in the Energy sector which is expected to report that largest year over year decrease in sales of all ten sectors while Health care sectors and Telecom services are expected to report that largest growth in sales.

Nine sectors have recorded a decline in expected earnings growth since the beginning of the quarter due to downward revisions with earnings estimates, led by the Materials, Industrials, and Energy sectors.

There are 76 companies that have issued negative EPS guidance while 32 companies have issued positive EPS guidance.

This week investors won’t have a lot of economic data to digest.

On Monday ISM services for September will be reported at 10:00 EST.

On Thursday October 8th the Fed Minutes from the September 17th FOMC policy meeting will be released.

Full Calendar

Monday- ISM Services- September

Tuesday- Trade Balance-August

Wednesday- MBA Mortgage Index, Consumer Credit (Aug.), Crude Inventories

Thursday- Fed Minutes (9/17 meeting), Initial and Continuing Jobless Claims, Natural Gas Inventories

Friday- Export-Import Prices, Wholesale Inventories

-Johnathan Schweitzer

BoyOn Saturday I participated in the Base 2 Space Climb at the Space Needle in Seattle to raise money for the Space Needle Foundation that benefits cancer research at Seattle-based Fred Hutchinson Cancer Research. Thanks to all those donors who supported me in this charity event!


About Johnathan Schweitzer 1564 Articles
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