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Economy 7 hours ago (Sep srcsrc, 2022 08:30AM ET)
© Reuters.
By Daniel Shvartsman
Investing.com – Markets started September on a strong note, with the closing up 3.4% in the first full week of the month and the jumping 4.src%, while the climbed only 2.4%. Whether that was just a market positioning adjustment or the sign of anything more sustained will be on watch this week, especially as a new set of inflation reports comes out. Corporate news is on the lighter side, though some big earnings reports and a rare major IPO are on the docket for the week ahead. This weekend served as a reminder of the ongoing and changing nature of the Russia-Ukraine war, and while the recent developments may not have a direct market impact, the repercussions could certainly reverberate through the financial world.
Here’s what you need to know for the week ahead in financial markets:
src. CPI and PPI Reports
A bevy of consumer price index (CPI) reports for August come out this week. India releases its on Monday, , , and the all release on Tuesday, the releases its report on Wednesday, releases its report on Thursday, and and the as a whole release theirs on Friday.
Producer Price Index (PPI) reports are also due out from , (Tuesday), the (Wednesday), and
The expectations are for inflation to be easing in the U.S., with expected at 0.3%, matching last month’s number; this would mark the lowest back-to-back readings since last fall. is expected to be -0.src%, as dropping gas prices continue to take pressure off inflation. is expected to be 0.3%, a rise from last month’s 0.2%, while the is also expected to be -0.src%.
Those expectations are quite different in Europe; the U.K. is forecast to see of 0.8%, a significant jump, while is expected to jump another 0.6%. The Eurozone is forecast to see a 0.5% rise in the , a jump from last month’s revised figure of 0.src%. The same is expected of , as energy prices still loom large with the seasons changing.
The ECB has already made its latest move, hiking interest rates by 75 basis points last week. The Fed is expected to stick to at least a , and the inflation reports are not expected to shake it, but no doubt Chair Jerome Powell would welcome signs that inflation is at least moderating meaningfully.
The Bank of England, whose meeting was due this week but postponed in the wake of Queen Elizabeth II’s death, faces a more fluctuating environment with new Prime Minister Liz Truss in charge and already having issued a . Its effect on the market is among the things the BOE will have to weigh; it will also get an as an additional piece of data to throw into the mix.
2. Pair of Key Earnings Reports
While Q2 earnings season has just about played itself out, there are two key software companies reporting results that are worth watching.
Software giant Oracle (NYSE:) reports Monday after the close, and is expected to show 4% earnings growth in its first quarter including newest acquisition Cerner (NASDAQ:). Oracle received a recent from a Global Equities analyst in light of the Cerner deal, as well as a from Guggenheim, but like many in the software and tech industry, has been adjusting to a more difficult macro environment, as the company has been . So the earnings report and conference call may be revealing.
Adobe Systems (NASDAQ:) reports Thursday after the market close. The company is expected to post 7.3% earnings growth and src2.6% revenue growth. A Jefferies analyst that the company hasn’t adjusted guidance for macro headwinds, only forex effects, so there could be more room to disappoint. The company disappointed in but the share price has since more than recovered. Adobe’s role as one of the original software companies that transitioned successfully to a SaaS (software as a service) model makes its report a useful bellwether.
3. Corebridge Financial IPO
2022’s volatile trading has left the IPO market as a casualty, with most IPOs that have made it to market being of the thinly traded, relatively obscure type. Corebridge Financial is a spin-off from AIG (NYSE:) but will come to market via an IPO rather than a direct issuing to AIG shareholders. It focuses on retirement solutions and insurance plans. The company is due to start trading on Thursday, and seeks to raise $src.68-$src.92B before factoring in fees or underwriter share purchases, vs. a valuation range of $src3.6-$src5.6B.
Read more about the IPO here:
4. Big Investment Conferences and Starbucks’ Investors Day
With the summer over and earnings season in its quietest moments, many companies are hitting the road to meet with investors. Investor conferences and presentations often feature strategic updates and announcements, shifts in sell-side analyst and market thinking, and even dealmaking.
A few notable conferences or analyst days this week:
Goldman Sachs Communicopia + Technology Conference, featuring companies such as: MongoDB (NASDAQ:), Warner Bros Discovery (NASDAQ:), Dynatrace (NYSE:), Dell Technologies Inc (NYSE:), Airbnb Inc (NASDAQ:), Snowflake Inc (NYSE:), ServiceNow (NYSE:), T-Mobile US Inc (NASDAQ:), Pinterest (NYSE:), and Visa (NYSE:)
Morgan Stanley 20th Annual Global Healthcare Conference, featuring companies like Moderna (NASDAQ:), Pfizer (NYSE:), Quidel (NASDAQ:), Merck & Company Inc (NYSE:), Bausch + Lomb Corp (NYSE:), AbbVie Inc (NYSE:), Eli Lilly (NYSE:), Insulet (NASDAQ:), and Quest Diagnostics (NYSE:).
Barclays) Global Financial Services Conference, featuring Cboe Global Markets Inc (NYSE:), US Bancorp (NYSE:), Huntington Bancshares (NASDAQ:), American Express (NYSE:), JPMorgan (NYSE:), Allstate (NYSE:), and Robinhood (NASDAQ:), among other companies.
On the analyst days front, Workday (NASDAQ:), Workiva (NYSE:), Corteva (NYSE:), and Starbucks (NASDAQ:) all have investor or analyst days on Tuesday, with Starbucks especially in close watch given the appointment of its new CEO recently.
5. Russia-Ukraine Developments and Aftershocks
Ukraine’s surprising recapture of the city of Izium in the country’s northeast has caught observers’ attention around the world as a potential turning point in the war. Ukraine is also attacking Russian positions in the south of the country, near Kherson, and should they be able to maintain an attack on two fronts and take and hold territory, it would mark a different tone.
Russia has continued to escalate economic pressure on Europe with the shutting down of the Nord Stream src gas pipeline. While the military landscape is shifting and uncertain, it is not hard to imagine that Russian setbacks could only increase Russia’s willingness to use its economic leverage with Ukraine and with Ukraine’s supporters in predictable and unpredictable ways, which could put more pressure on European countries to resolve their energy situation before the winter arrives, and which makes the inflation reports mentioned at the top of the article all the more relevant.
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