Investors will be closely watching major US banks’ quarterly earnings reports next week to gauge the health of the American economy. This comes as the federal government shutdown has disrupted the flow of new economic data, creating uncertainty in the market. Major US equity indexes slumped on Friday after President Trump’s comments heightened trade tensions with China, stalling the market’s recent momentum.
The earnings season kicks off with reports from JPMorgan, Goldman Sachs, Wells Fargo, and Citigroup on Tuesday. JPMorgan Chase & Co. is a leading global financial services firm with assets of $4.1 trillion. The company provides investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Bank of America and Morgan Stanley are scheduled to report on Wednesday. These reports will provide valuable insight into consumer spending and loan demand, key indicators of economic strength.
Analysts expect S&P 500 companies to report an 8.8% increase in earnings for the third quarter compared to last year, according to LSEG IBES. However, the ongoing government shutdown is raising concerns about economic growth, with the delayed release of key economic reports like the monthly employment report and consumer price index adding to the uncertainty. The U.S. Bureau of Labor Statistics said the CPI report will be published on October 24.
Economists warn that the longer the shutdown continues, the greater the risks to the economy. The absence of regular economic data makes it harder to interpret market signals and assess the true state of the economy. Other companies due to report next week include Johnson & Johnson, a healthcare company, and BlackRock, an asset management firm.
