Geoffrey Smith 

Investing.com — Four of America’s biggest banks will report on whether weak lending trends as reported by JPMorgan, NYSE: are a problem for the entire sector. After a 26 year high in China, producer price inflation will likely hit an all-time high of multi-years. According to one of the largest producers of semiconductors in the world, oil prices have risen following a warning by the International Energy Agency. The chip market will remain tight through 2022. What you need to know for financial markets this Thursday 14th October.

1. Focus on bank earnings

A wave of bank earnings hits the screens this morning, a day after JPMorgan put out a quarterly report that depended heavily on reserve releases to deliver the obligatory “beats expectations” headlines.

Citigroup Bank of America (NYSE) Wells Fargo (NYSE:) will all report early and will be scrutinized for signs of the weak loan growth that stood out in JPM’s report. JPM blamed this on a preference to prepay, suggesting that consumers became less cautious during the Delta-variant Covid-19 summer.

Morgan Stanley (NYSE:) will also report, and as a pure play investment bank may fare better by comparison – especially given the ongoing strength of the M&A market. However, JPMorgan’s numbers also hinted that even that may be starting to cool.

2. PPI in China, U.S. and China see rising jobless claims

At 8:30, weekly jobless claims statistics will offer a glimpse into developments in the labor market.  Expectedly, initial claims will fall to 319,000. This is down from 326,000.

Last week’s numbers suggested that the U.S. economy was getting over the temporary softness caused by the summer Covid-19 wave, which is now fading fast in the rear-view mirror. On Wednesday, the 7-day average nationwide number of new cases dropped to its lowest level in more than two months.

U.S. producer prices data will also be available at this time. As of August, producer price inflation jumped to 8.3%. The rest of the world suggests another rise in September. Analysts anticipate a rate of 8.7%.

Speeches from the Federal Reserve’s Thomas Barkin, Mary Daly and Raphael Bostic may show some reaction to either set of numbers.  China saw its producer price inflation rise to 10.7% over the night, which is the highest rate in 26-years.

TSM supports chipmakers, 3 stocks set to rise

U.S. stock markets are set to open higher later, building on Wednesday’s gains, which accrued mainly to tech names.

The stock was up by 210 points or 0.6% at 6:20 am ET. They were also up 0.7% and 0.8% respectively.

Chipmakers in particular seem set to be well bid after Taiwan Semiconductor Manufacturing, one of the world’s biggest contract manufacturers of silicon chips, said it expects its supply to remain tight through the whole of next year. It previously anticipated some moderated supply-demand pressure starting in 2022.

Earnings are also reported by UnitedHealth (NYSE®:) as well as Walgreens Boots Alliance NASDAQ®:. ADRs in French advertising group Publicis gained after posting stronger-than-expected earnings overnight.

4. German think tanks predict lower growth and higher inflation in 2021-2

Manufacturing around the globe continues to suffer from a chip shortage. Germany’s five leading economic think-tanks slashed its forecast for GDP growth in Europe’s largest economy to 2.4% from 3.7% earlier, blaming supply chain problems that have been concentrated in shortages of chips for the key automotive industry.

CNH, an Italian industrial company, announced that it will temporarily close several European plants because of the same problem.

These institutes have also increased their expectations for German inflation this year to 3%, and 2.5% next, respectively, from 2.4% and 1.7%. The European Central Bank has resisted tightening monetary policies, causing tension. The latest central bank to join the trend is Chile’s which raised its key rate by 125 basis points to 2.75% on Wednesday.

5. As the IEA raises concerns about tightness, oil prices are on the rise. EIA data available

Crude oil prices rose once again as the International Energy Agency reiterated the message that global demand is increasing faster than OPEC or its allies.

“Demand will outpace supply until at least the end of 2021,” the IEA said in its monthly report.

Futures rose 1.1% to $81.28 per barrel by 6:30 AM ET. They were also up 1.1% to $84.12 per barrel at the same time. This was despite a surprising rise in U.S. crude inventory reported Wednesday morning by American Petroleum Institute. The U.S. government’s weekly data are due at 10:30 AM ET.