Markets will have plenty of information to chew on this week, thanks to the US and European growth, as well as results from big-hitting FAANGs. Meanwhile, the central bank of Turkey is scheduled to meet following another midnight reshuffle.

Many people are asking the question, “Is Christmas cancelled?”

1. CHARTING CHINA   

    From an Evergrande-induced property market crisis to power shortages halting production lines supplying Apple (NASDAQ:) and Tesla (NASDAQ:), the world’s no. There are many things to be concerned about in the No. 2 economy.

    A good gauge of the fallout comes with Monday’s Q3 GDP figures and other keenly-watched data points, from factory production to retail sales.

    Economists forecast China’s economy grew 5.2% year-on-year, the weakest reading in a year, amid power rationing, persistent supply bottlenecks and soaring commodity prices, all as consumption languished amid sporadic COVID-19 flare-ups.

    The real estate sector, a key growth driver, is reeling from rising defaults, with sales tumbling and construction slowing. For fear of provoking bubbles in real estate and debt, however, not many expect the central banking to come rescue them.

Graphic: China growth slowing https://fingfx.thomsonreuters.com/gfx/mkt/myvmngkjzpr/Pasted%20image%201634212277756.png

PROFIT STREAM 2/

Netflix (NASDAQ 🙂 reports on the third quarter for the “FAANG” group of large U.S. technology and growth companies, including Apple, Amazon (NASDAQ :), Netflix, and Google-parent Alphabet.

The streaming service said that its most successful series, “Squid Game,” has launched. “The Crown” was awarded the Emmy for drama last month. Netflix purchased Night School Studio, the creator of video games. This was done to increase its diversification.

    Netflix’s stock price has climbed some 16% in 2021, broadly in line with the and in the middle compared to the other FAANG stocks. Other companies due to report results next week include Tesla, Johnson & Johnson (NYSE:), and Intel (NASDAQ:).

Graphic: “FAANG” stocks in 2021 https://graphics.reuters.com/USA-STOCKS/FAANG/gkvlgxxqlpb/chart_eikon.jpg

3. INFLATION SPOTTING

The markets will search for indications that future earnings are being hampered by supply chain strains and production bottlenecks.

    With rates hikes in the works to fend off inflation stickiness, financial and energy sectors are set to thrive as rising yields dent the appeal of so-called growth stocks.

The third quarter earnings season of luxury company LVMH and tech-star SAP, as well as steelmaker Outokumpu has left no bitter taste for the palates. It is now the turn for blue chips like ASML Holdings (NASDAQ:), Unilever(NYSE:), Barclays ABB.

    Earnings are seen jumping 46.7% year-on-year for pan-European index constituents, though the gap between positive and negative revisions has been shrinking, vindicating the narrative Europe is cruising past peak growth.   

Graphic: Earnings revisions https://fingfx.thomsonreuters.com/gfx/mkt/dwvkrazzlpm/Pasted%20image%201634293481215.png

4. CHRISTMAS CANCELLED

World leaders are hopeful that supply disruption will not be the Grinch who stole Christmas one year ago, after coronavirus lockdowns had dampened festive spirit.

Despite being more than two years away, panic buying has already begun for turkeys and other festive treats amid chaos in the supply chain.

White House warns Americans about higher Christmas prices and empty shelves. Los Angeles and Long Beach, which are busy ports, have expanded operations to move an estimated 500 000 containers.

Britain advised consumers to purchase normally following the diversion of containers with toys and other electrical goods from its largest port. It was overloaded.

The supply chain may be in trouble with Friday’s flash purchasing managers indexes (PMIs) for October from Europe, Australia and other countries. Germany’s business sentiment already is suffering.

Graphic: Long Beach Anchorage congestion (number of vessels) https://fingfx.thomsonreuters.com/gfx/mkt/gdpzywwbjvw/theme1310.PNG

5./EMERGING WOOES

The excitement of emerging markets is not limited to central banking, and Turkey has more than any other country for its entertainment.

After President Tayyip Erdogan initiated another reshuffle that allowed for further rate cuts to combat stubbornly high inflation, which sent the lira down to new records lows.

However, central banks across the globe are busy raising rates. To combat rising inflation, Hungary will likely raise its benchmark Tuesday.

Russia’s central banks will probably follow suit on Friday, as many policymakers have warned of increasing price pressures.

Graphic: Lira timeline October 15 https://fingfx.thomsonreuters.com/gfx/mkt/zgpomrnrmpd/Lira%20timeline%20October%2015.PNG