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Top 5 Things to Watch in Markets in the Week Ahead By Investing.com

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© Reuters

Noreen Burke

Investing.com — Investors will have a lot to chew on in the next week’s first wave of earnings reports. Meanwhile, U.S data may help to confirm expectations that the Federal Reserve will begin to taper. Figures on third quarter Chinese economic growth on Monday will show the impact of multiple recent hits to the world’s second largest economy. Inflation data from the UK could be released later this week, which may increase expectations of a Bank of England rate rise. The first Bitcoin futures ETF will start trading this week, bringing the cryptocurrency closer to its all-time highs. Here’s what you need to know to start your week.

1. Earnings

Dozens of companies will be reporting in the coming week, including Tesla (NASDAQ:), Intel (NASDAQ:) and Johnson & Johnson (NYSE:), as the first major wave of third quarter earnings results gets underway.
Netflix (NASDAQ 🙂 launches third quarter reporting to the ‘FAANG’ consortium of U.S. technology giants Facebook (NASDAQ :), Apple, Amazon (NASDAQ :), Netflix and Google’s parent Alphabet.

Bloomberg reported that “Squid Game”, the video streaming service, has been its largest series launch to date and will generate almost $900 millions in revenue for Netflix.

U.S. stocks rose on Friday, with the Dow posting its highest weekly percentage gain in a week since June. Goldman Sachs (NYSE 🙂 completed a strong third quarter for major banks. Investors will be watching for any signs of supply chain disruptions or higher energy costs over the next few weeks.

2. Data from the United States

On Monday, the U.S. will release data about industrial production. Reports on building permits and starts are due Tuesday.

Supply chain issues are likely to slow down industrial production, however, housing data should remain strong. The recent increase in mortgage applications points to an additional pickup in activity following a slightly slower spring and summer.

The Fed’s Beige Book is due out on Wednesday and could cement expectations for tapering. Last week’s minutes of the Fed’s September meeting showed that a November announcement is on the cards and tapering could even start later the same month.

3. Chinese GDP

Recent months have seen the Chinese economy suffer a string of losses from Evergrande’s property market crisis and the emergence of the Delta variant. There has also been an energy crunch, shortages, and high commodity prices.

Investors will therefore be paying close attention to Monday’s gross domestic product figures for the third quarter, along with data on retail sales and factory production.
Economists are expecting growth in the world’s number two economy to have slowed to 5.2% year-on-year, the slowest in a year, from 7.9% in the previous quarter.

China’s real estate sector, a key driver of growth, is reeling from rising defaults, with sales tumbling and construction slowing as Evergrande, once China’s top-selling developer, battles against default on more than $300 billion in debts.

4. Inflation in the UK

On Wednesday, data is expected to show the UK’s fastest rise in consumer price inflation for nearly nine years. Economists are expecting a reading in the region of 3.2%.

This report is expected to be closely watched as there are growing expectations that the BoE will raise interest rates to combat rising inflation before the end the year. It would become the first central bank major to do this since the outbreak of coronavirus.

Due to rising fuel prices and supply-chain disruptions, the BoE is expecting inflation to rise above 4% by the end of this year and stay around the same level for the first six months of 2022.

5. Futures ETF

If the Securities and Exchange Commission does not make a final objection, the ETFs that are the first to be listed in America as bitcoin futures ETFs will launch within the next week.

ProShares Bitcoin Exchange Traded Fund was scheduled to begin trading on Tuesday. The Invesco Bitcoin Strategy Exchange Traded Fund, which is also scheduled to trade on the New York Stock Exchange, will be launched a day later unless it’s blocked by the SEC.

ETFs will use bitcoin futures, which are already traded on Chicago Mercantile Exchange. This is due to regulatory concerns about liquidity issues and price manipulations on spot exchanges.

The launch of the ETFs could pave the way for a stream of similar products, potentially fueling a run higher for the world’s largest digital currency which hit peaks of $62,892 on Friday, not far from its all-time highs of $64,778.

This report was contributed by Reuters

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