By Noreen Burke
Investing.com -- Earnings season is ramping up with the four biggest U.S. companies by market value among those set to report results in the coming week. The U.S. is to release third quarter GDP figures which are expected to show a return to growth after the technical recession in the first half of the year. The European Central Bank is widely expected to deliver another jumbo rate hike of 75 basis points on Thursday as inflation in the Eurozone approaches 10%. Political events in the U.K. will remain in the spotlight as the Conservative Party selects a new prime minister. Meanwhile, investors will be watching out for delayed economic data from China after President Xi Jinping consolidated power for a historic third term on Sunday. Here’s what you need to know to start your week.
Megacap earnings
The four largest U.S. companies by market capitalization are due to report in the coming week with investors keen to see how the corporate bellwethers are performing against a backdrop of soaring inflation and and the Federal Reserve’s aggressive rate hike path which have raised fears over the prospect of a recession.
Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) are due to report on Tuesday, followed by Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) on Thursday.
Because of their heavy weightings, "if those stocks don’t get it done, that puts pressure on the indices to continue to go down," Chuck Carlson, chief executive officer at Horizon Investment Services told Reuters.
Third-quarter earnings season has so far has been better-than-feared after results from companies including Goldman Sachs (NYSE:GS), Bank of America (NYSE:BAC), Netflix (NASDAQ:NFLX) and Johnson&Johnson (NYSE:JNJ) boosted sentiment.
U.S. GDP
The U.S. is to release a first look at third quarter GDP on Thursday, with the economy expected to have expanded at an annualized rate of 2.1% after two consecutive quarters of contraction in the first half of the year.
The economic calendar also includes data on the Fed’s favored measure of inflation, the core personal consumer expenditure index, along with data on personal income and spending. Investors will also get data on durable goods orders, initial jobless claims, consumer confidence and reports on the housing market in the form of figures on both new and pending home sales.
Fed policymakers will enter their traditional blackout period ahead of their upcoming meeting on Nov 1-2 when they are all but certain to hike interest rates by 75 basis points for a fourth-straight time.
ECB rate hike
A second 75 basis point rate hike by the ECB on Thursday looks like a done deal despite the looming prospect of recession in the euro area as Russia’s war in Ukraine stokes an energy crisis that is driving up inflation and hitting growth.