It has been another week of volatility in the stock market, characterized by mounting fears of a wider Middle East conflict and a more cautious fourth-quarter earnings outlook announced by U.S. corporations.
Investors absorbed the latest economic data, which revealed stronger-than-expected growth in the third quarter and inflation in line with expectations in September, solidifying forecasts of unchanged interest rates at the upcoming Federal Open Market Committee Meeting in the coming week.
US GDP growth beats expectations
The U.S. economy exceeded expectations in the third quarter, recording a robust 4.9% growth rate, according to advance estimates. This result outperformed economist projections of a 4.3% growth rate. The primary driver behind the number: robust consumer spending, which increased at an annualized rate of 4%.
Bill Ackman exits Treasury shorts
Renowned hedge fund billionaire Bill Ackman took to social media platform X to announce that he closed his short positions in U.S. Treasury bonds. Ackman attributes this decision to expectations the economy is slowing down more rapidly than recent data indicates and expressed his concern about the level of risk in the world.
Bitcoin rallies
Bitcoin had a robust week of gains, marking a double-digit return and reaching its highest level in over five months. The D.C. Circuit Court of Appeals settled a dispute between the U.S. Securities and Exchange Commission and Grayscale, instructing the SEC to review its rejection of Grayscale’s application to transform its Bitcoin Trust into a spot Bitcoin ETF.
Furthermore, BlackRock has registered the iShares spot Bitcoin ETF under the ticker “IBTC” with the Depository Trust & Clearing Corporation.
Major U.S. companies beat earnings estimates
Major U.S. corporations surpassed earnings expectations in the third quarter, with the exception of major oil companies. Nevertheless, there were notable warnings that the forthcoming quarters may not be as optimistic as anticipated, particularly from Meta Platforms.
Amazon roars in the AI race
Amazon.com Inc. emerged as the top performer for the week among tech titans, propelled by stellar third-quarter results. Analysts lauded Amazon’s performance and its growing commitment to artificial intelligence investments. Conversely, Alphabet, the parent company of Google, had one of its toughest weeks of 2023. Alphabet exceeded profit and revenue expectations for the third quarter, but disappointing performance in the cloud business took a toll.
What to watch
The spotlight will be on the two-day Federal Reserve Open Market Committee meeting, culminating in the interest rate decision to be revealed Wednesday. While the markets have already fully factored in an interest rate hold, there will be heightened attention on Chair Jerome Powell’s comments during the news conference. Wednesday will also include the release of the ISM Manufacturing Purchasing Managers’ Index, and Friday will bring the eagerly awaited October jobs report, along with the ISM Services Purchasing Managers’ Index.
Upcoming earnings to watch
On Monday, McDonald’s will take the spotlight among mega-cap companies. Tuesday will feature earnings from Pfizer, Advanced Micro Devices, Amgen and Caterpillar. Wednesday’s lineup includes Qualcomm, Mondelez, CVS Health and Airbnb. Thursday will bring the highly awaited Apple quarterly report, along with Eli Lilly, ConocoPhillips, S&P Global, Starbucks and Booking Holdings.
More:Student loan repayments hit a glitch for 305,000 borrowers: Payment amounts are wrong
More:Is strike pay taxable? What it will mean for UAW strikers and others at tax time.
Benzinga is a financial news and data company headquartered in Detroit.
Read More: All eyes on the Fed committee as it meets to decide interest rates