Investors will be paying close attention this week to 3rd quarter earnings results from a host of corporations this week and weigh an advanced 3rd quarter U.S. GDP report due out on Friday for signs about how strong the U.S. economy performed towards the 2nd half of 2016.
According to briefing.com, the consensus forecast is for 2.5 percent U.S. GDP growth in the 3rd quarter of 2016 which comes after the U.S. GDP rose 1.4 percent in the 2nd quarter of 2016.
Corporate Earnings In Focus; Several Tech Companies Reporting This Week
Visa reports earnings on Monday along with T-Mobile and Paccar.
Cupertino, Ca based Apple reports their calendar 3rd quarter earnings (fiscal 4th quarter) on Tuesday along with AT&T.
The consensus mean Apple estimate for EPS is $ 1.66, according to Factset, compared to the same period a year ago EPS of $ 1.96.
If Apple reports a year over year decline in EPS for Q3 2016, it will mark the third consecutive quarter of year-over-year decline with EPS.
Caterpillar will also report on Tuesday and Boeing’s earnings will come into focus on Wednesday.
Alphabet Inc.-Google reports on Thursday along with Seattle-based Amazon.
Chevron posts earnings on Friday.
Some of the other economic data this week includes the consumer confidence report for October due on Tuesday, new home sales for September on Wednesday, durable orders and pending home sales for September on Thursday.
Fed’s VP Stanley Fischer Weighs In
During a October 17th speech at the Economic Club of New York, Federal Reserve VP Stanley Fischer gave a speech about the reasons interest rates as so low.
Fischer said there are important factors contributing to both short and long-term interest rates being so low at the present time and outlined three reasons why we should be concerned about such low interest rates.
Here are Fischer’s 3 reasons:
- Is the possibility that low long-term interest rates are a signal that the economy’s long-run growth prospects are dim.
- Is that low interest rates make the economy more vulnerable to adverse shocks that can put it in a recession.
- Is that low interest rates may also threaten financial stability as some investors reach for yield and compressed net interest margins make it harder for some financial institutions to build up capital buffers.
Fischer said that interest rates are kept very low at the moment because of the need to maintain aggregate demand at levels that will support the attainment of the Fed’s dual mandate goal of reaching maximum sustainable employment and price stability, measured by the U.S. inflation rate obtaining the Fed’s target level of 2 percent, based on the Fed’s preferred inflation gauge, the personal consumption expenditures (core PCE).
According to the Fed’s preferred Core PCE inflation index gauge, inflation rose 1.7 percent in August.
Based on the Fed’s latest economic projections from the Fed’s September monetary policy meeting, the median projection from Fed members shows that the Fed’s 2 percent inflation target, measured by core PCE inflation, won’t be reached until 2018.
Full Economic Calendar:
Tuesday- Consumer Confidence (October), Case Schiller 20 city index (Aug.), FHFA Housing Price Index (Aug.)
Wednesday- New Home Sales (Sept.), International Trade in Goods (Sept.), Crude Inventories, MBA Mortgage Index
Thursday- Durable Orders (Sept.), Pending Home Sales (Sept.), Initial and Continuing Claims, Natural Gas Inventories
Friday- U.S. 3rd quarter GDP, chain deflator, Michigan Sentiment- final (October).