Wall Street got the Q3 earnings season off to a stellar start last week as all the big financial names reported (more info below) although BlackRock didn’t quite get to hit the $10 tn AUM mark as currency movements conspired against them. Overall, the results so far have been positive, and whilst there is still the large majority of companies to report, the early evidence is that earnings growth will do its best to keep valuations in check – which was further helped by the weak month of September for stocks. The S&P 500 is back above its 50 and 100 day moving average and the dollar was weaker against a basket of currencies on Friday, highlighting the ‘risk on’ sentiment evident in the market as last week closed out.
However, this morning’s price action has matched the dreary weather as Chinese data released overnight disappointed, with GDP growing by 4.9% in the third quarter versus an expectation of 5.2%. Industrial Production compounded the GDP miss by coming in at 3.1% for the month of September vs a 4.5% forecast. Finally, the global geopolitical focus will begin to shift to the COP 26 Climate Change Conference which kicks off in Glasgow at the end of the month, as a tough winter ahead for energy prices highlights how bumpy the road to net zero may be.