The Week Ahead on Wall Street

Economic Data

There are no major economic data points scheduled for today.

Tomorrow, the NFIB Small-Business Index is due for September. The monthly gauge helps track the sentiment of small business owners across the country. Sentiment actually improved in August as inflation concerns cooled somewhat. With that said, price increases and labor shortages are still weighing on the minds of many small business owners.

Federal Open Market Committee, or FOMC minutes are due Wednesday afternoon. Wall Street will be parsing through minutes from the central bank’s latest policy meeting to see if they can extract any additional information about the Fed’s rate hike campaign. Specifically, analysts want to get a sense of how long it will last and how far the Federal Reserve is willing to go to squash stubbornly high inflation.

Speaking of inflation, the Consumer Price Index for September is due Thursday. Along with Core CPI, economists will get a sense of where inflation stands heading into the final quarter of the year. Initial jobless claims and continuing jobless claims are also released today.

Finally, on Friday, September retail sales are due. Since consumption is such a major factor to overall GDP, this is a figure that many investors watch very carefully. September sits right between the back to school shopping period and fall holiday months so it will be interesting to see how retail sales held up after summer’s end. The University of Michigan’s 5-year inflation expectations report for October is also due along with August Business inventories.

Earnings

The week starts off relatively slow on the earnings front but then picks up on Wednesday with a big report from PepsiCo (PEP). The multinational company stopped making Pepsi, 7UP, and Mountain Dew in Russia due to the country’s decision to invade Ukraine. Investors will be curious to hear how this impacts the company’s bottom line. They might also ask about the energy drink market. This past summer PepsiCo took a $550M stake in Celsius, which some analysts think has done a good job marketing itself as a healthier alternative to products like Red Bull and Monster (MNST).

Taiwan Semiconductor Manufacturing Co (TSM) announces third quarter earnings on Thursday. Chip stocks have been in focus over the past year given their importance to everything ranging from cars to computers. Although there has been some volatility in the space, Morgan Stanley (MS) is projecting a return to growth for the semiconductor industry by the latter half of next year. This prompted Morgan Stanley to name TSMC Asia’s most valuable listed corporation, calling it “an enabler of future technology.” Investors want to know how the company is staying competitive in the space and what plans it has for 2023.

Delta Air Lines (DAL) also reports its latest results on Thursday. The pandemic has upended travel, causing ticket prices to fall originally, and then pick up this past summer. Many airlines have experienced staffing issues, including finding pilots. For what it’s worth, The Points Guy ranked Delta the best US airline of 2022 based on things like customer satisfaction, lounges, and involuntary bumps. Affordability was the only ding against Delta in the overall rankings.

Friday is when the third quarter earnings season really kicks into high gear with a handful of reports from big banks. This includes JPMorgan Chase & Co (JPM), Wells Fargo & Co (WFC), Morgan Stanley, and Citigroup (C). Slightly smaller players including PNC Financial Services Group (PNC), US Bancorp (USB), and First Republic Bank (FRC) are also scheduled to report. In terms of the sector at large, investors will be curious to hear how the rising rates are impacting their bottom lines. Traditionally, when rates rise, this increases what’s called the Net Interest Margin for banks, or how much they can make from the spread between rates on the savings and lending products. These banks all have different divisions so it’s just one piece of the overall puzzle.

The week ahead at SoFi

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