Stocks seem to have gotten rid of the spooky October trading pattern for the moment. However, earnings this week could determine whether they continue that trend.

Numerous companies report, Netflix TeslaTo Intel, Procter & Gamble American Express.The first wave of major reports includes railroads, airlines and tech firms.

Stocks rose in the last week. The Russell 2000 small-cap stock index led the way with an increase of 2.1% by Friday afternoon. The top performers were the consumer discretionary, materials and industrial sectors. Tech was second with 2.3% gains. Real estate investment trusts was the best performing sector, with a jump of more than 3.7%.

Paul Hickey (co-founder of Bespoke) stated that “unlike previous earnings seasons we’ve recently seen, the expectations heading into this earnings period are a bit less muted as far as analyst’s revisions are concerned.” This tends to lower expectations, making the earnings season easier. Volatility stands for “down.” Managerable stands for “up.” It’s an acceptable setup considering the fact the market is down leading up to the earnings season.

Hickey indicated that although the stock market surge of the last session isn’t clear, it could signal a change in tone from the normally negative month of October.

He said, “We will have a better understanding once we go through all the earnings reports that are coming up next week.” That’s the important tell. The initial reaction has been good, considering all the worries people have about headwinds. Everybody has been concerned about inflation and supply chain problems, but the businesses that have reported their concerns are doing well.

Hickey stated that NikeStock has recovered a lot of its decline after supply problems were discussed by the company Sept. 23, in the fiscal first quarter report.

These are the major banks Citigroup Goldman Sachs Bank of America, have reported quarterlyThe past week saw solid results. According to Refinitiv’s I/B/E/S data, the financial sector (which includes banks and insurance companies) is expected to experience a profit increase of 30%. Overall the profits of S&P 500 companies are expected to gain 32%, based on estimates and actual third-quarter reports.

Refinitiv reports that companies have outperformed expectations by 15.6% so far, which is lower than the average long-term profit of 4% but still higher than the 18.4% average over the past four quarters. It is predicted that energy will experience the largest profits gains of 1,517% while utilities is only forecast to gain 0.2%.

Jonathan Golub of Credit Suisse, chief U.S equity strategist, stated, “Some small groups are knocking on the lights but it’s still not the same thing like if it were uniform.” According to the Credit Suisse chief U.S equity strategist Jonathan Golub, 96% growth is anticipated for the cyclical and tech groups this quarter. Tech will likely be 25 %…. The story is that both the financial and the cyclical markets will surprise as long as there’s disruption. Companies will be able to take advantage of disruption as long it continues. While it might be short-term, the disruption may last for several years.

Golub stated that it might be risky for the market to have only certain earnings winners. He stated that if we are able to get an average beat of between 8% and 10% but it is being held back by a smaller portion of the market and the median company not delivering higher earnings numbers it is a problem. This is one of my concerns regarding the earnings season.

Golub indicated that investors worry about shrinking margins due to higher input costs. However, he stated that the bigger problem is companies not being able to deliver because they do not have any products.

“They received an order. They won’t be able to fulfill the order and therefore can’t sell it. This is the danger. It’s possible. Backlogs are increasing and inventories being adjusted down. Golub stated that delivery times have been getting longer and more complicated. That’s the danger.

Golub believes that the S&P 500It will reach 4,600 at the end 2021. That’s up from 4,470 today, and he says he has no plans to change that. Although he expects that cyclicals will do well, technology stocks should be only market performers.

“[Tech’s]Growth isn’t impressive for the forward 12 month, and it’s expensive.” he stated. I believe that the valuations of growth stocks, and more particularly tech stocks will face strong headwinds due to their lower expected sales growth and higher prices. It would be fine if this were the current quarter. But it isn’t. The next twelve months are the future.”

He said, “If tech is able to get the interest rates right and all other things work out for it that would be great.” He said that he doesn’t see tech being a leading company in the coming year. “I think they’ll be market performers, but I think they’ll be winners for the next decade —100%.”

It 10-year TreasuryYield which particularly influences technology and growth sharesAfter Friday’s reversal, the rate was 1.57% topping 1.60% in the past week

There are several economic reports that you can watch. These include the existing home sales report on Thursday, and Philadelphia Fed’s manufacturing survey. Friday’s Markit services and manufacturing PMI data are released. Wednesday afternoon is the release of Federal Reserve’s brown book economics.

Crypto ETF

First bitcoin futuresAn exchange-traded fund may begin trading next week when ProShares’s Bitcoin Strategy ETF will debut. The Securities and Exchange Commission may still block the ETF’s filing if they object to it before Monday at midnight. but that is not seen as likelyCNBC was told by a source.

Bitcoin rose above $60,000 for the first time in six months Friday,Investors bet that the ProShares, and other crypto-based ETFs, would trade in the near future.

Week ahead calendar

Monday

Earnings Albertsons, State Street,Zions Bancorp FNB, Steel Dynamics

8:15 a.m. Survey of business leaders

9:15 a.m. Industrial production

10:00 a.m. NAHB survey

4:00 p.m. TIC information

Tuesday

Earnings Netflix, Johnson & Johnson, Procter & GambleTravelers United Airlines,Synchrony Financial Halliburton,Manpower Group Kansas City Southern,Bank of NY Mellon Fifth Third Intuitive Surgical

8:15 a.m. Starts Housing

10:00 a.m. Mary Daly, President of the San Francisco Fed

Raphael Bostic (Atlant Fed President)

Atlanta Fed’s Bostic at 2:00 PM

Wednesday

Earnings Tesla Verizon IBMCSX. – Lam Research Baker Hughes, Abbott Labs, NasdaqBiogen and Knight-Swift Transportation. Canadian Pacific Railway. Northern Trust. Tenet Healthcare, PPG Industries, SLM

12:01 p.m. Atlanta Fed’s Bostic

12:01 p.m. Charles Evans, Chicago Fed President

1:45 p.m. St. Louis Fed President James Bullard

10:00 p.m. Beige book

8.35 pm San Francisco Fed’s Daly

Thursday

Earnings: AT&T Intel,Blackstone Union PacificChipotle Mexican Grill Snap WhirlpoolAutoNation. American Airlines, KeyCorpAlly Financial Freeport-McMoRan, Nucor, Quest Diagnostics, Mattel, Genuine Parts, Alaska Air, Tractor Supply

8:15 a.m. 8:30 a.m.

Philadelphia Fed manufacturing at 8:30 AM

10:00 AM Existing home sales

Friday

Earnings Honeywell American Express, Schlumberger,Regions Financial Roper (VF Corp) HCA Holdings,Seagate Technology

9:45 am Manufacturing PMI

9:00 a.m. PMI Services

10:00 am San Francisco Fed’s Daly