Week Ahead on Wall Street: No Recession in Sight

By: Anneken Tappe · October 23, 2023 · Reading Time: 3 minutes

GDP Predictions Surge

Remember when everyone was worried about a recession? Well, so far there hasn’t been one in 2023. This week, the Commerce Department will post the U.S. economy’s report card for the third quarter, and it may look pretty good.

The Federal Reserve Bank of Atlanta’s GDPNow model predicts the economy grew a whopping rate of 5.4%, on a seasonally adjusted and annualized basis, between July and September.

Consumer spending, the engine of our economy, has continued to defy expectations and chug along. Economists expected that high prices and persistent inflation would stop people from spending. But in September, U.S. retail sales beat expectations once again.

Whether consumers can keep the party going in the last three months of the year, which are crucial for retailers given the holiday shopping period, remains to be seen. The first look at Q3 GDP will be published on Thursday morning.

A Busy Earnings Week Ahead

Bank of Hawaii (BOH) is scheduled to kick off the earnings week, followed by mining company Cleveland-Cliffs (CLF). The latter recently had its $7.3 billion buyout offer of U.S. Steel (X) rejected.

On Tuesday, a busy day awaits, with several industry leaders set to report, including Microsoft (MSFT), 3M (MMM), Coca-Cola (KO), General Electric (GE), Spotify (SPOT), and Verizon (VZ).

On Wednesday, Boeing (BA), Hilton (HLT), Mattel (MAT), and Facebook owner Meta (META) will report. In late September, Meta announced a new slew of AI-powered tools, including smart glasses, digital assistants, and the Quest 3 virtual reality headset.

On Thursday, we’ll get earnings reports from Comcast (CMCSA), Mastercard (MA), Southwest Airlines (LUV), UPS (UPS), Chipotle Mexican Grill (CMG), and an anticipated first earnings call from Kenvue (KVUE) after its spin-off from Johnson & Johnson (JNJ). Ford Motor (F) will also give insight into its current challenges with the United Auto Workers union. The automaker recently said it was at its limit regarding labor deals.

Concluding the week are ExxonMobil (XOM) and Colgate-Palmolive (CL). Exxon recently announced plans to acquire Pioneer Natural Resources (PXD) for $60 billion.

Other Economic Reports

We’re starting out with the Chicago Fed National Activity Index, and a look at business activity in the U.S. manufacturing and services sectors Tuesday. On Wednesday, as usual, we’ll get an update on the 30-year fixed-rate mortgage. It’s nearing 8%, sitting at its highest level since November 2000. Additionally, new home sales data, which dropped 8.7% in August, will be released.

On Thursday, aside from the advance GDP report, which will also include personal spending for the third quarter, look for the September durable goods orders data.

On Friday, the Fed’s favorite inflation index — core PCE — for September will be in focus. In August, the price gauge only increased 0.1% month-over-month. On the year, it rose 3.5%.

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