The corporate calendar will continue to focus heavily on third quarter earnings in the coming week, with energy, healthcare and cable/telecom well represented. The last of the FAANG’s will report with Facebook on Tuesday and Apple on Thursday. And several other important reports from GE, Airbus, Exxon Mobile, Chevron, Shell, and BP. Considering the weakness after the Amazon and Google reports there will be a lot of pressure on Apple especially to report an inline no surprises, type of quarter. Higher ASP’s and continued services growth will offset flat sales of iPhones.
On the economic front, the Case-Shiller Index, along with Eurozone Q3 GDP (consensus calls for unchanged growth of 0.4%) and confidence numbers are all expected on Tuesday; with the US jobs report due at the end of the week. Last month’s NFP missed with 134k and the consensus is at 190k with an unchanged unemployment report at 3.7%. The BOE will unanimously will stand pat on rates Thursday but expect talk of lowered growth and higher inflation outlook. China will start applying even tighter controls on money flowing in and out of the country as outflows increase. China will also use its vast FX reserves to stop any precipitous fall in the Yuan past 7 per dollar, as that level could risk triggering speculation and heavy capital flight.
S&P bullish sentiment remains depressed closing Friday at 13%. Other major markets have low sentiment as well. Nikkei at 17%, Euro Stoxx at 10%, UK FTSE 100 at 14%, German DAX at 10%, French CAC at 10%. We always say sentiment is a condition and not a trigger. It can and might stay low for a period of time just as it did at the highs in the Summer. By the way we’re adding all the new sentiment charts in European markets into the new site quite soon with the all new interactive sentiment charts. In the US there hasn’t been clear downside DeMark Countdowns in progress across the board as we saw on the upside in September and on all the indexes in the US this is the first of five down waves. We’re expecting a lower high bounce followed lower lows.