Top 5 things to watch in markets in the week ahead

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Top 5 things to watch in markets in the week ahead

Investing.com -- U.S. inflation data could offer more clarity on the future path of interest rates after Friday’s strong jobs report while Wednesday’s minutes of the Federal Reserve’s latest meeting will also be closely scrutinized. Meanwhile, third quarter earnings season gets underway and energy prices remain in focus. Here’s what you need to know to start your week.

  1. Inflation data

The U.S. is to release what will be keenly anticipated consumer and producer price index data for September this week as investors continue to weigh the Fed’s ‘higher for longer’ rates mantra.

August’s CPI report showed the fastest increase in 14 months as the cost of gasoline surged, although core inflation, which excludes food and fuel costs rose at the slowest pace in nearly two years.

Friday’s jobs data showed a larger-than-expected surge in nonfarm payrolls last month with slowing wage growth, suggesting that monetary policy could remain tight for some time.

Hot inflation figures could reinforce the Fed’s message that interest rates need to remain higher for longer. The Fed is widely expected to hold rates steady at its Oct 31-Nov. 1 meeting, although some traders are betting on another increase.

  1. Fed minutes

The U.S. central bank is to publish the minutes of its September meeting on Wednesday with market watchers looking for clues on whether policymakers are leaning towards another rate hike before the end of the year.

Investors will also get the chance to hear from several Fed officials during the week including Atlanta Fed President Raphael Bostic , Minneapolis Fed President Neel Kashkari , Boston Fed President Susan Collins, Dallas Fed President Lorie Logan along with Vice Chair Philip Jefferson and Governor Christopher Waller .

  1. Third quarter earnings kick-off

Third quarter earnings season gets underway with reports from several big banks with Wall Street investors eager for a catalyst to revive stocks in the face of surging bond yields.

JPMorgan (NYSE: JPM ), Citigroup (NYSE: C ) and Wells Fargo (NYSE: WFC ) are all due to report ahead of the market open on Friday with investors on the lookout for signs of the impact from higher rates on everything from loan demand to consumer behavior.

Other companies set to report during the week include snacks and beverages giant PepsiCo (NASDAQ: PEP ) on Tuesday, Delta Air Lines (NYSE: DAL ) on Thursday and insurer UnitedHealth Group (NYSE: UNH ) on Friday.

Earnings season could determine the near-term path for stocks, with the S&P 500 still holding a 10% gain for the year even after its recent pullback.

  1. Oil prices

Last week saw oil prices post their steepest weekly losses since March, after another partial lifting of Russia's fuel export ban compounded demand fears due to macroeconomic headwinds.

On Friday, Brent futures settled up 51 cents at $84.58 per barrel. U.S. West Texas Intermediate crude futures settled up 48 cents at $82.79.

For the week, Brent posted a decline of about 11% and WTI recorded an over 8% drop, on worries that persistently high interest rates will slow global growth and hammer fuel demand, even if supplies are depressed by Saudi Arabia and Russia, who said they will continue supply cuts to year end.

Escalating geopolitical risks in the Middle East could impact oil prices in the week ahead.

  1. IMF and World Bank meetings

Global finance officials and central bankers are heading to the Moroccan city of Marrakesh for the annual meetings of the International Monetary Fund and the World Bank.

The meetings are being held against a backdrop of worries over whether inflation can be brought back under control without tipping major economies into a crisis.

In addition to multiple appearances by central bankers and policymakers the IMF’s World Economic Outlook, which contains an updated round of forecasts, is to be released on Tuesday.

--Reuters contributed to this report

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