The S&P 500 index, reflecting the performance of 500 publicly owned companies, closed last Friday near support at 4,328 with resistance at 4,380. Despite a sell-off triggered by the Israel-Gaza conflict causing a surge in oil prices and US Treasuries, the index gained 0.45% last week. This gain was buoyed by robust earnings from leading banks such as JPMorgan (NYSE:JPM), Citigroup (NYSE:C), and Wells Fargo (NYSE:WFC).
Noted bear Mike Wilson of Morgan Stanley (NYSE:MS) sees few reasons for a fourth-quarter rally for the S&P 500. The index is influenced by the aggregate performance of its constituent companies, US and global macroeconomic data, interest rates set by the Federal Reserve, inflation, and other metrics impacting Fed decisions.
This week, the market's attention will turn to major companies including Johnson & Johnson (NYSE:JNJ), Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), Tesla (NASDAQ:TSLA), Morgan Stanley, Netflix (NASDAQ:NFLX), Union Pacific (NYSE:UNP), American Express (NYSE:AXP), Taiwan Semiconductor, Charles Schwab (NYSE:SCHW), American Airlines (NASDAQ:AAL) Group and Schlumberger (NYSE:SLB) that are set to release their third-quarter earnings.
Consensus earnings forecasts for this week include Johnson & Johnson ($2.52 EPS on $21.06 billion sales), Goldman Sachs ($5.54 EPS on $11.13 billion revenue), Lockheed Martin (NYSE:LMT) ($6.62 EPS on $16.72 billion sales), Netflix ($3.48 EPS on $8.54 billion), Tesla ($0.74 EPS on $24.22 billion sales), Morgan Stanley ($1.31 EPS on $13.22 billion), Procter & Gamble (NYSE:PG) ($1.72 EPS on $21.59 billion revenue), Philip Morris International (NYSE:PM) ($1.62 EPS on $9.22 billion revenue), Union Pacific ($2.44 EPS on $6 billion), AT&T (NYSE:T) ($0.62 EPS on $30.24 billion sales), CSX (NASDAQ:CSX) ($0.43 EPS on $3.58 billion sales), Taiwan Semiconductor ($1.17 EPS on $16.67 billion revenue), and American Express ($2.95 EPS on $15.36 billion revenue).
Bank of America's credit card lending business remained stable in September, despite a minor increase in delinquencies and a decrease in net charge-offs. However, the bank's stock dropped more than 6% in Monday’s premarket following an 8% rise on Friday.
Key economic events this week include the release of US Retail Sales for September and a significant speech by Federal Reserve Chair Jerome Powell. Data on US Building Permits and Housing Starts for September will be released on Wednesday. The CME Group’s FedWatch Tool indicates a 90% likelihood of unchanged interest rates at the November 1 Fed meeting.
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