A Historic Week Begins for Investors

A Week Full of Historical Events

This week, important developments that investors are eagerly waiting for are on the horizon. The Federal Reserve will announce its latest decision regarding interest rates, major companies' earnings will be released, and a critical meeting will take place between President Trump and Chinese President Xi Jinping.

Last week, the stock market closed at record levels with the delayed release of the Consumer Price Index (CPI) report. The report for September showed a slight decrease in inflationary pressures at 3%, allowing the Federal Reserve to continue reducing interest rates this Wednesday.

The CPI for September was initially scheduled to be released on October 15, but this date was postponed due to the government shutdown. The report was set at 3%, which is 0.1% lower than expected but slightly higher than the 2.9% recorded in August.

Excluding volatile items such as food and energy prices, the core inflation was also recorded at 3% in September. This figure is a decrease from the previous month's 3.1%. Core inflation increased by 0.2% on a monthly basis.

In addition, investors are expecting critical consumer confidence data from the Conference Board to be released on Tuesday. The earnings results for this financial quarter from major tech companies such as Microsoft, Amazon, Apple, Alphabet, and Meta are significant for market expectations. Investors will be closely watching whether these giants have met expectations amid the artificial intelligence (AI) boom.

Leading energy companies like Exxon Mobil, Chevron, Shell PLC, and TotalEnergies will also announce their results this week. The data from industry leaders like UnitedHealth Group, Verizon, and Southern Company will also be closely watched in the market.

The meeting between Trump and Xi will take place on Thursday within the scope of the APEC Summit in South Korea. This meeting, closely followed by market ethics, is expected to contribute to the continuation of the trade war between the two countries. China’s significant restrictions on the export of rare earth minerals have caused considerable turmoil in the American agricultural sector. The American Onion Association has expressed concerns about farmers facing an increasing financial crisis.

Additionally, if oil prices continue to rise, it appears that refineries will pass these costs down the supply chain. This means the American public may face new issues with fuel prices. Goldman Sachs economists predict that the effects of the trade war will increase product prices and that companies will pass 70% of the costs onto consumers.

Even if the discussions go well, it is questionable whether a definitive “agreement” will eliminate the uncertainty in the market. Thierry Wizman, a global currency and interest rate strategist at Macquarie, stated, “We believe that an important agreement that will free the markets from uncertainty is still a long way off.”