Daniel Shvartsman

Markets closed out October higher despite misses on high-profile earnings reports and a surprising decision by the central bank. Each of the top U.S. indexes, including,,and – set new records for closing. European indices also moved higher, while cryptocurrency trading witnessed a slew of spikes. This week will see market optimism tested by all sides, with a host of earnings from corporations, non-farm payrolls and a Fed meeting expected to indicate the beginning of QE tapering.

Here’s what you need to know to start your week.

1. The Earnings Season Continues

Stock markets all over the globe continue to focus on earnings. Although many big names reported last week, Alphabet(NASDAQ:), Microsoft (NASDAQ;) and Alphabet(NASDAQ:), were the top performing companies, and Apple (NASDAQ, Amazon (NASDAQ), and Facebook (NASDAQ 🙂 lagging. This quarter, an even wider array of companies will release Q3 results.

These are:

• Companies that offer travel servicesRyanAir (LON) (Monday), Air Canada (TSX:) (Tuesday), Booking Holdings (NASDAQ:) (Wednesday), Expedia (NASDAQ: (Thursday), Amadeus IT (MC: Friday).
• Producers of commodities or related companies such as ConocoPhillips (NYSE:) (Tuesday), Diamondback Energy (NASDAQ:) (Monday), Williams Companies Inc (NYSE:) (Monday), Mosaic Co (NYSE:) (Monday), CF Industries (NYSE:) (Wednesday), EOG Resources (NYSE:) (Thursday), Dominion Energy Inc (NYSE:) (Friday), and Enbridge (NYSE:) (Friday)
• Tech companiesFrom e-commerce, to semiconductors and software (Monday), Arista Networks (NYSE:) (Monday), Activision Blizzard (NASDAQ:) (Tuesday), Electronic Arts (NASDAQ:) (Wednesday), Etsy (NASDAQ:) (Wednesday), Datadog Inc Skyworks (NASDAQ) (Thursday), (NASDAQ::) Carvana Co (NYSE.) (Thursday), and Wayfair, (NYSE.) (Thursday).
• Pharmacies and IndustrialsThese include Pfizer T-Mobile US Inc. (NASDAQ:) Tuesday, (NYSE::) Eaton (NYSE:) (Tuesday), Cummins (NYSE:) (Tuesday), Emerson (NYSE:) (Wednesday), Humana (NYSE:) (Wednesday), CVS Health (NYSE:) (Wednesday), Toyota Motor Corporation (NYSE:) Thursday, and Honda Motor Co Ltd ADR [NYSE:] (Friday).

Investors will be thinking about supply chain and inflation as they examine these reports. They also need to know how the U.S. slowdown in Q3 affected these companies and what it means for their outlooks. Companies will be looking at how to recover from pandemic-related quarters and figuring out the new norm for those companies who are recovering or have been big winners in 2020, as well.

2. Nonfarm payrolls

After October’s disappointing and the muted number, November’s will test the strength of the U.S. economic recovery. After the NFP’s two-monthly disappointments, the NFP is expected to create 385K jobs in November.

We will not know if the lull in supply chain and summer delta surge related to this temporary lull. This report could impact Fed tapering speed and give Democrats an additional push in Congress to negotiate their budget packages.

3. Fed Meeting

Following a meeting that lasted two days, Wednesday’s (FOMC-) report will come out at 2. Jerome Powell, Fed Chair has stated in recent weeks that tapering will continue in November. So the question remains whether this plan will be realized.

The Bank of Canada’s last week that they would stop quantitative easing caught some by surprise, and it remains in question both how quickly central banks will move away from pandemic-era extraordinary measures and how the economy and the markets will react.

Also to watch in Powell’s comments and the that follows is what his current view on inflation is, after the debates over whether it is transitory or persistent, and what that means for the pace of interest rate hikes in the months (years?) to come. Note that the stock popped on Friday following trading lower most of the month. If there are surprises, we will be paying attention.

Many markets expect a 15-basis point increase when the Federal Reserve releases its November Monetary Policy Decision. How markets handle the return of monetary tightening remains to be seen, no matter how much it is ‘priced in’ already via expectations.

4. Reports on Manufacturing PMI

We enter the final holiday season and supply chain problems as well as various slowdowns in growth will be the focus. There are a few PMI reports this week. Already, China has a dismal 49.2, which is a. All Euro Zone members, as well as the,. and others, will be reporting. The expectation is for growth across all sectors – the index will show numbers over 50 – which will provide an additional indicator of how the global economy will set up and finish the year. It may also indicate how consumers will need to buy their holiday gifts in advance.

5. Bitcoin: A New ETF for Bitcoin, and Monetary Tightening

The cryptocurrency was first to reach a new record two weeks back. It reached that status last week as the most popular cryptocurrency. Meanwhile, news continues to be dominated by smaller and more grounded coins like.

Two headline stories are worth watching for cryptocurrency impact this week. A third bitcoin ETF, the VanEck Bitcoin Strategy eTF (NYSE:), is set to begin trading by Wednesday. While the initial ETF, ProShares Bitcoin Strategy ETF(NYSE:), created excitement that propelled bitcoin to unprecedented heights, it was not the same with the second ETF, Valkyrie Bitcoin Strategy ETF [NASDAQ:]). The response to this ETF was much more measured.

It’s also worth watching how the crypto complex reacts to a tightening environment. Many of crypto’s investment logic is linked to inflation and the price of money. An increase in capital cost due to tightening central banks could make traditional assets and currencies less attractive. The tightening of crypto in 2018 may have been coincidental, but it’s worth considering even though optimism remains high in this sector.