Source: Sharecast
Kathleen Brooks, research director at XTB, said: "The highlight for this week will be the Q3 earnings reports for the major Wall Street banks including JP Morgan, Goldman Sachs, Morgan Stanley, Citi and Bank of America.
"These results can tell us important information about the health of the US economy. Are consumers still spending? What is the trend for loan arrears? Are businesses still borrowing at higher rates and are credit conditions tightening?"
Brooks said traders may also focus on global M&A flows and whether the banks see a slowdown in advisory income due to rising interest rates making mega cap mergers less likely in the coming months.
"Any comment on IPOs, including delayed IPOs for some of the most important names in AI, will also be worth listening out for," she said.
"If banks paint a bleak picture of the US economy, this will be market-moving. While we could see bonds recover and yields fall, this could also be bad news for stocks, as traders could get spooked by signs of recession or weakening economic growth in the world’s economic powerhouse.
"US financial names have been weaker than the overall US stock index this year, and the financial sector is up only 4% YTD. However, in the past month, as bonds have sold off and US Treasury yields have surged, the US financial sector has dropped by nearly 4%. An upside surprise could see this sector attempt to recover, while weak earnings, especially if it is centred in the consumer and economically sensitive areas of the bank, could trigger further declines."
In the UK, investors will eye third-quarter trading statements from BP and Michael Page and full-year results from housebuilder Bellway and YouGov.
Full-year results from Premier Inn owner Whitbread, half-year numbers from Bytes Technology and Angling Direct, and trading updates from Oxford Instruments, Transact owner Integrafin, Ninety One and Reach will also be out.