The Week Ahead 23.10.2023

It’s another relatively quiet week on the macro front, however there are some key data points worth looking out for. The biggest releases will be on the 6th when unemployment data will be released in the US. The current unemployment rate is 3.8%, with economists forecasting a fall to 3.7% for September. A surprise, or sharp rise in the unemployment rate might force the Federal Reserve to rethink any further monetary policy tightening planned for the remainder of the year. Coinciding with this, non-farm payrolls will also be published on the 6th. In Australia, the RBA will make an interest rate call on the 3rd with the expectation that the rate will be staying at 4.1%

Earnings

It’s a very big earnings week coming up. The majority of the ‘Magnificent 7’ will publish their quarterly earnings throughout. On the 24th both Microsoft and Alphabet will release their Q1 and Q3 earnings respectively. Also on the same day, payment processing company Visa will release their Q4 earnings. On the 25th Meta will release their Q3 earnings followed by Amazon on the 26th. With strong earnings from Netflix last week, but weak earnings from Tesla, market participants are unsure as to the outlook for the rest of the mega cap stocks. Commentary from equity market strategists remains positive but not overly confident.

Chart of the Week

Over the last 3 months, the level of volatility in equity markets has increased greatly. The Volatility Index (VIX) measures the level of option activity on the S&P500 and is used to predict further price movement. Since the end of July the index is up 60.1% and 27.6% since the beginning of the Middle East conflict.