The July-September quarter earnings season gathers pace next week. With major overseas semiconductor companies ASML and TSMC due to report, market reaction is expected to be the focus.
Financial institution earnings will be concentrated next week, and many expect performance to diverge depending on the strength of trading and fee income amid rising interest rates. Attention remains high on AI-related stocks, but given their previous purchases driven by a single dominant theme, the market will also assess whether short-term profit-taking has run its course. Overall, strong earnings are expected, although uncertainty about the outlook remains.
ASML is scheduled to report on the 14th and TSMC on the 15th next week. ASML raised its full-year revenue and gross margin outlook in its previous April-June quarter results, making negative results appear unlikely. However, its share price is near its year-to-date high, and uncertainty remains over the direction of export restrictions to China. TSMC has already released preliminary revenue figures, which marked a quarterly record. Whether it will raise its full-year revenue outlook again is a key focus, although much of the additional information is expected to be provided in its next full-year results.
Although US Treasury yields have been trending lower since the latter half of this week, caution remains, with the 10-year yield briefly reaching 5.36% on the 7th, its highest level since 2002. Economic data such as retail sales and CPI are expected to attract attention next week as well, and if CPI exceeds market expectations, the risk of renewed interest in higher rates could resurface. A rate hike by the FOMC at its October meeting is considered unlikely.
Scheduled economic data releases include September existing home sales, the September federal budget balance, the September consumer price index, the Beige Book, September retail sales, the September producer price index, various economic activity indexes, initial jobless claims, August foreign securities investment in the United States, import and export price indexes, industrial production and capacity utilization, and the New York Fed Business Leaders Survey. Major earnings releases are scheduled for Citigroup, Goldman Sachs, J&J, JPMorgan, Wells Fargo and UnitedHealth on the 13th; BOA, BlackRock and Morgan Stanley on the 14th; US Bancorp and Alcoa on the 15th; and Travelers on the 16th.