Are we now in a more fragile world?

Are we now in a more fragile world?

Corporate Earnings News
Global market indices
Fixed Income
Commodity sector news
Key data to move markets this week
Global macroupdates

Corporate Earnings News

According to Refinitiv I/B/E/S data, on 6 October the 23Q3 Y/Y blended earnings growth estimate was 1.3%. If the energy sector is excluded, the growth rate for the index was 6.2%.

Of the 20 companies in the S&P 500 that have reported earnings to date for 23Q3 by 6 October, 85.0% reported above analyst expectations. This compares to a long-term average of 66%.

The 23Q3 Y/Y blended revenue growth estimate is 0.9%. If the energy sector was excluded, the growth rate for the index was 3.3%. Full-year growth expectations for 2023 are currently 2.3%, the lowest since 2020 and below the long-term average of 7.8%. Q3 is also expected to be a small contributor to the full-year growth rate with a forecast y/y growth rate of 1.3%. Instead, the bulk of growth expectations are expected in Q4 with a growth rate of 10.8%.

Corporate earning calendar 13 October - 19 October 2023

Friday: BlackRock, Citigroup, JPMorgan Chase,UnitedHealth Group, Wells Fargo
Monday: Charles Schwab
Tuesday: Bank of America, Goldman Sachs, Johnson & Johnson, Lockheed Martin, Prologis, Bank of New York Mellon, Omnicom Group
Wednesday: Tesla, Morgan Stanley, Procter & Gamble, Netflix, Abbott Laboratories, State Street Corporation, Lam Research, US Bancorp, Wipro, Equifax, Citizens Financial Group
Thursday: AT&T, Philip Morris International, Blackstone,Snap-On Inc., Fifth Third Bancorp, Intuitive Surgical, Freeport-McMoRan, Union Pacific Corp., Marsh & McLennan, Taiwan Semiconductor Manufacturing

US Stock Indices

Nasdaq 100 +3.57% MTD and +35.31% YTD
Dow Jones Industrial Average +0.69% MTD and +1.79% YTD
NYSE +0.58% MTD and +2.00% YTD
S&P 500 +1.64% MTD and +13.51% YTD

Lower US bond yields were stoking risk appetite this week, which is supportive to equities and commodities.

Mega caps: A good week for the mega caps as falling treasury yields made these fast growth equities more attractive. Apple, Alphabet, Amazon, Meta Platforms, Tesla, Microsoft, and Nvidia are all up this week.

Energy stocks had a mixed week this week as concerns around oil prices and gas supplies hit investors. Apa Corp (US), Baker Hughes, Marathon Petroleum, ConocoPhillips, Phillips 66, Occidental Petroleum, Shell, Halliburton were all up this week.Chevron was down this week due to the closure of its gas fields in Israel following Hamas’ attack on Israel, while Exxon Mobil shares fell after it agreed to buy rival Pioneer Natural Resources in an all-stock deal valued at $59.5 billion. Energy Fuels was also down this week

Materials and Mining stocks were generally up this week as demand for copper and aluminium by China has remained relatively robust. Yara International, Freeport-McMoRan, Albemarle Corporation, CF Industries Holdings, Mosaic, Sibanye Stillwater and Newmont Mining are all upthis week, while Nucor Corporation is down this week.

European Stock Indices

Stoxx 600 +0.65% MTD and +6.65% YTD
DAX +0.48% MTD and +11.03% YTD
CAC 40 -0.05% MTD and +10.16% YTD
IBEX 35 -0.72% MTD and +13.75% YTD
FTSE MIB +0.62% MTD and +19.88% YTD
FTSE 100 +0.16% MTD and +2.26% YTD

Other Global Stock Indices 

MSCI World Index -0.99% MTD and +9.57% YTD
Hang Seng +0.47% MTD and -9.55% YTD


The USD continued to fall this week with the Bloomberg Dollar Spot Index falling for a seventh day after a recent chorus of commentary from Federal officials suggesting they may refrain from tightening further at the Fed’s next meeting on 1 November. All eyes will be on today’s US CPI report as it will give a further indication of the Fed’s possible next move. Up until last week the USD had strengthened over two quarters as labour market tightness, with NFP coming in at 336,000 last Friday, an eight month high, had markets convinced that the Fed would need to engage in further tightening. The GBP is +0.94% MTD and +1.78% YTD against the USD. Sterling has been up for the past seven days, the longest streak since July 2020. The EUR is +0.44% MTD but -0.80% YTD against the USDas slowing economic growth in the Eurozone and expectations of another pause continue to hit the Euro.


Bitcoin -0.72% MTD and +61.13% YTD
Ethereum -6.26% MTD and +30.49% YTD

As noted by Barrons, cryptocurrencies extended their declines this week despite widespread advances seen in other risk-sensitive assets, with gains from a recent bullish trend fizzling out as cryptos returned to familiar trading ranges. Events in the Middle East and the flight to safe haven assets like gold, the USD, and US Treasuries have also negatively impacted cryptocurrencies this week.

Fixed Income

US 10-year yield to 4.56%.
German 10-year yield to 2.72%.
UK 10-year yield to 4.33%.

US Treasury yields on benchmark 10-year notes fell to a roughly two-week low on Wednesday. Prices rose due to their being perceived as a safe haven securities following on from the weekend attack by Hamas on Israel. However, a still tight labour market means that a strong labour market is underpinning consumer demand which risks keeping inflationary pressures above the Fed’s target for longer.


Gold futures to $1,887.30 an ounce.
Silver futures to $22.13 per ounce.
West Texas Intermediate crude to $83.30 a barrel.
Brent crude to $85.71 a barrel.

Oil prices declined from Tuesday, when OPEC producer Saudi Arabia pledged to help stabilise the market. Prices had spiked on Monday following Hamas’ attack on Israel on Saturday.However oil has been suppressed by growing expectations, based on dovish comments from some Fed officials, that US interest rates have peaked. The International Energy Agency (IEA) also lowered its oil demand growth forecast for 2024, suggesting worsening global economic conditions and progress on energy efficiency will weigh on consumption.The agency now sees 2024 demand growth at 880,000 barrels per day (bpd), compared with its previous forecast of 1 million bpd. There has also been higher US inventories with US crude oil stockpiles swelling by about 12.9 million barrels, according to American Petroleum Institute figures on Wednesday. OPEC said that despite the seasonal rise in demand, ongoing uncertainty and economic developments in Europe and other areas are expected to impact oil demand for the rest of 2023 and 2024.

Gold prices rose this week due to the decline in yields, a more dovish tone from some Fed members and a degree of safe-haven buying as investors worried about possible contagion effects following on from the attacks in Israel and actions in Gaza.. A declining USD and bond yields would continue to be supportive to gold.

Note: As of 5 pm EDT 11 October 2023

Key data to move markets this week


Thursday: Speeches by ECB executive board members Frank Elderson and Fabio Panetta and ECB monetary policy meeting accounts. 
Friday: A speech by German Bundesbank President Joachim Nagel, Spanish and French CPI, Eurozone Industrial Production, and a speech by ECB President Christine Lagarde.
Saturday: A speech by German Bundesbank President Joachim Nagel and ECB President Christine Lagarde.
Monday: Italian CPI and Eurogroup Meeting.
Tuesday: Ecofin Meeting, Eurozone ZEW Economic Sentiment, German ZEW Current Situation and Economic Sentiment.
Wednesday: Eurozone Core Harmonised Index of Consumer Prices.


Thursday: Industrial production and Manufacturing production.
Friday: Speeches by Bank of England Governor Andrew Bailey and Deputy Governor for Financial Stability, Sir Jon Cunliffe.
Saturday: A speech by BoE Governor Andrew Bailey.
Tuesday: Average earnings, Claimant Count Rate, Claimant Count Change, Employment Change, and ILO Unemployment Rate.
Wednesday: CPI, PPI Core Output, PPI, and RPI.
Thursday: Gfk Consumer Confidence.


Thursday: CPI and Initial Jobless Claims.
Friday: Michigan Consumer Sentiment Index and UoM 5-year Consumer Inflation Expectation.
Tuesday: Retail Sales, NY Empire State Manufacturing Index, and Industrial Production.
Wednesday: Building Permits, Housing Starts and Fed’s Beige Book.
Thursday: Initial Jobless Claims, Philadelphia Fed Manufacturing Index, and Existing Home Sales Change.


Friday: CPI, PPI, Exports, Imports and Trade Balance.
Wednesday: GDP, Industrial Production and Retail Sales.


Thursday - Sunday: IMF/World Bank Meeting.

Global Macro Updates

The cracks are showing. On Tuesday the IMF said that its new baseline forecast is for global growth to slow from 3.5% in 2022 to 3.0% in 2023 and 2.9% in 2024, well below the historical (2000–19) average of 3.8%. Global inflation is forecast to keep declining, from 6.9%  in 2023 to 5.8% in 2024 due to tighter monetary policy and lower international commodity prices. Core inflation is generally projected to decline more gradually. This indicates that there is still a good chance of a soft landing. Risks to the world economy remain skewed to thedownside, as elevated inflation means central banks may have to keep interest rates higher in a way that stretches the capacity of borrowers to repay debt, according to the IMF’s latest Global Financial Stability Report. However, these forecasts were created before Saturday’s attack in Israel. As a result of the attack, oil prices have been even more volatile, with traders seeking to price in the potential repercussions if the conflict were to spread across the region, potentially endangering crude flows. European gas prices were also up this week. Both of these situations increase the risk of higher inflation which may require central banks to again reconsider their pauses or slowdowns in the tightening cycle. It would also dampen global growth prospects even further than the IMF forecast.

A divided Fed? Although Fed minutes from the September meeting, released on Wednesday showed that Participants generally judged that, with the stance of monetary policy in restrictive territory, risks to the achievement of the committee’s goals had become more two-sided,” and “a majority” of Fed officials saw one more rate increase “would likely be appropriate,” the surge in long-term Treasury yields has resulted in some Fed policymakers to suggest they may hold off on another hike with some, such as Fed Bank of Boston President Susan Collins, saying that the economy was yet to feel the full impact of the rate hike cycle. In the minutes, Fed officials also pointed to uncertainties around the economy, oil prices and financial markets as supporting "the case for proceeding carefully in determining the extent of additional policy firming that may be appropriate." The economy continues to remain resilient despite a rise in PPI in September. Expectations are growing that the Fed will have another “hawkish hold” at its meeting on 1 November. Headline CPI increased by 0.4% in September, an easing from August’s 0.6% which was the largest increase in 14 months. On an annualised basis it was up 3.7% in September, the same as in August. However, core inflation increased 0.3% last month. On an annualised basis it increased 4.1%, the lowest since 2021 and below August’s 4.3%. Although this was a positive sign that inflation is falling, it is still higher than the market and possibly the Fed, expected. This means that the Fed’s hawkish tone of higher for longer will likely continue during its next meeting. 

British lethargy. The Office for National Statistics (ONS) data showed economic output expanded by 0.2% in August from July’s revised 0.6% drop. The ONS said the economy would need to grow by 0.2% in September to avoid a contraction in the third quarter, excluding other factors. but the bigger picture remained one of only sluggish growth after last year's surge in inflation and 14 back-to-back interest rate hikes by the Bank of England. According to Reuters, at this week’s IMF meeting in Morocco, BoE Chief Economist Huw Pill said the question of whether the BoE has done enough to see off high inflation was becoming more finely balanced. "We have done a lot over the last two years. A lot of that policy is still to come through," Pill told a panel discussion on Thursday on the sidelines of the IMF meeting.  "Whether we've done enough - or whether we have more to do - I think is becoming a more finely balanced issue. But we will do what we need to do in order to have inflation at 2% on a lasting basis.”

Growth or price stability for the ECB? The minutes of this month's ECB meeting showed the decision to hike its interest rates again had been a close call. Some ECB policymakers such as Bank of France Governor Francois Villeroy de Galhau, are hoping that the ECB can engineer a soft landing for the Eurozone economy but at the same time recognising that the ECB will have to keep rates at its current level to bring inflationdown. The ECB’s consumer expectations report showed a marginal increase in August’s inflation expectations for both 12 months ahead (3.4% to 3.5%) and three years ahead (from 2.4% to 2.5%). Although small these indicate that fact that inflation expectations are still rising despite the ECB’s rate hikes supports the hawkish argument. This may impact consumer demand and spending and potentially contribute to lower growth moving forward.

DISCLAIMER: This article is provided to you for informational purposes only and should not be regarded as an offer or solicitation of an offer to buy or sell any investments or related services that may be referenced here.

While every effort has been made to verify the accuracy of this information, EXT Ltd. (hereafter known as “EXANTE”) cannot accept any responsibility or liability for reliance by any person on this publication or any of the information, opinions, or conclusions contained in this publication. The findings and views expressed in this publication do not necessarily reflect the views of EXANTE. Any action taken upon the information contained in this publication is strictly at your own risk. EXANTE will not be liable for any loss or damage in connection with this publication.

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