BCS Barclays PLC

Investors experienced yet another week of turbulence in the last five trading sessions. In the past week, the S&ampP 500 index fell by 1.8%, while the Nasdaq Composite index declined by 3.2%. Comparatively, the Dow Jones Industrial Average index rose by 0.73%.

The 10-year U.S. Treasury yield rose to 4%, the highest level since 2008, on hotter-than-expected inflation data. The consumer price index, or CPI, rose 0.4% in September after rising 0.1% in August. In the last 12 months, the CPI has surged by 8.2%.

Increases in shelter, food, and medical care were the largest of many contributors to the monthly rise in costs. To tame inflation, the Federal Reserve has already raised interest rates several times in 2022. But a stronger-than-expected labor market continues to fuel price increases making it difficult for the central bank to get commodity prices under control.

Additionally, crude oil prices slumped 7% last week after surging 15% in the previous week on concerns over a slowdown in demand as China continues to impose lockdowns in multiple regions.

Let’s see what will impact the stock market in the upcoming week.

The S&ampP 500 earnings season will gain pace

Investors can expect the stock market to remain volatile as several companies will be reporting their Q3 earnings this week. It includes financial giants such as:

Bank of America (NYSE: BAC)

Goldman Sachs (NYSE: GS)

Barclays (NYSE: BCS)

Other big-ticket earnings in the week will include:

Netflix (NASDAQ: NFLX)

Tesla (NASDAQ: TSLA)

Procter & Gable (NYSE: PG)

American Express (NYSE: AXP) and

Verizon (NYSE: VZ)

Analysts expect Q3 earnings to be a mixed bag for corporates as a strong dollar and a sluggish economy might impact profit margins as well as revenue. The average earnings growth for companies part of the S&ampP 500 is forecast at 2.4%, the weakest quarter since Q3 of 2020, where earnings fell by 5.7%.

FactSet data suggests 65 companies part of the index expect to report negative earnings guidance while 41 have issued positive guidance.

Home sales data

The U.S. housing market will be under the radar this week. The NAHB, or the National Association of Home Builders, will publish the monthly Housing Market Index on Tuesday, which tracks the sentiment of home builders.

The U.S. Census Bureau will release housing starts and building permits for September on Wednesday. Housing starts are forecast to fall to 1.48 million in September, compared to 1.58 million in August.

Thursday will see the National Association of Realtors issue existing home sales numbers for September that is forecast at 4.7 million, compared to 4.8 million in August. Rising interest rates are weighing heavily on demand, with the 30-year fixed-year mortgage rising to 7%, which is the highest in more than 20 years. The 30-year mortgage rate stood at 3.11% in January 2022.

China all set to report GDP figures

Investors will be closely watching a crucial growth update from China, the world’s second-largest economy, on Monday. The country’s gross domestic product, or GDP, is forecast to rise by 3.8% in Q3, compared to a 2.6% decline in Q2. On a year-over-year basis, China’s economy is forecast to grow by 3.5%.

A report from Investopedia explains, “The Chinese economy slowed considerably during the first half of the year, as the government imposed stringent lockdowns in major cities in an effort to contain COVID-19 outbreaks. China’s economy is projected to expand by 5.5% in 2022, slowing sharply from an 8.1% growth rate in 2021.”

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