In Focus This Week: Tech Earnings, Third-Quarter GDP, Housing Data

The world keeps watching closely the latest development in the crisis between Israel and Hamas. The conflict is raising geopolitical, cultural and economic concerns.

Companies that already reported earnings have flagged that the current situation represents a risk to their performance.

U.S. President Joe Biden asked Congress to urgently approve a $106 billion national security package that includes aid to Israel, Ukraine, as well as humanitarian aid to Gaza.

Congress action remains paralyzed though because of the lack of a House Speaker. A consensus within the Republican party over a name or a deal with Democrats for a solution will be needed before the package is discussed.

Earnings

The most anticipated third-quarter earnings this week come from the technology sector. Microsoft, Texas Instruments and Alphabet, owner of Google, report Tuesday, followed by Meta on Wednesday.

General Motors is scheduled for Tuesday and Ford for Thursday. Their numbers may reveal any impact of the Auto Workers Union strike, which started Sept. 14.

In the consumer products industry, names like Kimberly Clark and Coca-Cola will present their results on Tuesday.

Another interesting one is Mattel, scheduled for Wednesday. The results will show how the Barbie movie benefitted the toy manufacturer and entertainment company. The movie opened in July and became the highest-grossing film in 2023.

GDP

The first reading of the U.S. gross domestic product in the third quarter will be released Thursday. The data gain more attention after Federal Reserve Chair Jerome Powell said last week that economic growth has been surprising to the upside and that a slowdown will be needed for inflation to return to the 2% annual target.

Retail sales, one of the main components in the GDP calculation, rose 0.7% in September, more than double the 0.3% expected by economists.

According to Reuters, estimates for GDP annual expansion in the July-September period are as high as 5.1%. In the second quarter, the U.S. economy grew 2.1%

Fed officials won't speak publicly this week as they are now in a media blackout period ahead of their meeting on Oct. 31 and Nov. 1.

Housing Data

Two indicators coming up on the next few days will provide a better picture of the housing market. The number of new home sales are scheduled for Wednesday and pending home sales for Thursday.

Home purchases have been falling because mortgage rates are at the highest level in more than 20 years while prices keep rising. Many homeowners are discouraged from selling their properties as their mortgages are locked into low rates. That reduces the inventory of homes for sale, putting upward pressure on prices.

NBA Season

The 78th NBA regular season starts Tuesday and goes on through April 14, followed by the playoffs, beginning on April 20, and then the finals, starting June 6. The Denver Nuggets were the winners of the last season. Los Angeles Lakers' start LeBron James will enter his 21st season as NBA's oldest player.