In Focus This Week: House Speaker, US Inflation, Earnings, Birkenstock IPO

The second week of October has a busy calendar or economic and business news amid an important election in Congress.

Politics will be again in the center of the attention this week as the House of Representatives prepares to choose its new Speaker.

Republicans will hear the main candidates to replace Kevin McCarthy, who became the first speaker in U.S. history to be removed from the post. He was voted out last week after members of his own party were angry at his bipartisan agreement to prevent a government shutdown.

The decision on the GOP candidate is expected for Wednesday. Whoever is elected House Speaker will face the immediate challenge of finding a solution to fund the government. The stopgap measure approved under McCarthy provides funding though Nov. 17. Non-essential federal activities will be suspended after that if Congress doesn't pass a new spending bill.

Inflation

The consumer price index for the month of September will be released on Thursday. It's the most expected economic data for the week. In August, annual inflation accelerated to 3.7% from 3.2% in July, boosted by higher gas prices.

Federal Reserve officials have signaled that another interest-rate hike will be necessary this year to tame inflation.

The Fed will release on Wednesday the minutes of its Sept. 20 meeting. The document will show why policymakers decided to maintain the U.S. benchmark rate unchanged in the range of 5.25% to 5.5%.

Birkenstock IPO

German shoemaker Birkensktok will sell shares in an initial public offering this week. The 250-year-old company plans to sell at least 32 million shares between $44 and $49 each.

If the stocks are sold at the top of the range, the total raised in the transaction will be around 1.6 billion. The shares are expected to start trading on Wednesday.

Birkenstock, which produces popular casual sandals, aims to use the funds to pay debt.

The transaction will show market appetite for new shares after the high-profile IPOs of chipmaker Arm and delivery app Instacart. Both companies were able to sell their stock at a higher price than initially estimated.

Earnings season

Some of the biggest U.S. companies start reporting in the next few days how they performed during the third-quarter.

Pepsico results will come out on Tuesday. Delta Air Lines' will be out on Thursday. But the most expected are the earnings of the major banks.

Citigroup, JPMorgan and Wells Fargo release their financial statements on Friday. The numbers will show how the financial industry is doing amid high interest rates, concerns about inflation and growth, and how all of that is affecting their businesses with consumers, companies and markets.

IMF/World Bank Meetings

Finance ministers and central bankers of 190 countries gather in Marrakech, Morocco, starting Monday, for The International Monetary Fund and the World Bank hold their annual meetings. The IMF's global economic outlook will be released on Tuesday.

Ahead of the meetings, IMF Managing Director Kristalina Georgieva said last week that global growth continues to be weak and below the average of two decades before the Covid pandemic. She also said that fighting inflation should be the main priority.