Earnings Reports, Interest Rates, and AI Investments Shift Investor Focus

Earnings Reports Poised to Shift Investor Focus

This week, a significant array of earnings reports are set to divert the attention of investors from Middle Eastern headlines and soaring Treasury yields. Investors anxiously await reports from leading companies such as Amazon (AMZN), Microsoft (MSFT), Meta Platforms (META), Coca-Cola (NYSE:KO), AbbVie (ABBV), and Chevron (CVX).

Central Bank Actions and Interest Rate Verdicts

The European Central Bank’s (ECB) decision on interest rates will be revealed on October 26. After initiating 450 points of rate hikes since July 2022, it’s anticipated that the ECB will retain stable rates. In the run-up to its next Federal Open Market Committee (FOMC) meeting in November, the United States Federal Reserve will continue its blackout period. Nevertheless, speculation regarding ‘how long’ these higher rates will persist remain ongoing. BNP Paribas predicts that the Federal Reserve will uphold steady rates through 2023, envisaging a rate cut only in June 2024. Meanwhile, analysts like John M. Mason of Seeking Alpha and Mott Capital Management spotlight the Federal Reserve’s unwavering stance on inflation and offer caution about potential stock market implications.

Noteworthy Forthcoming Events

Critical events coming up include Qualcomm’s (QCOM) unveiling of their novel strategies at the company’s Snapdragon Summit scheduled for October 24. The Women’s Wear Daily Apparel & Retail CEO Summit promises intriging talks by esteemed speakers such as Jeff Gennette – CEO of Macy’s (M) and Andrea Guerra – CEO of Prada (OTCPK:PRDSY). On queue to address the Bloomberg Technology Summit is Jared Kaplan, Co-founder and Chief Scientist of Anthropic. Amazon (AMZN) also has plans in the pipeline to invest up to $4B in a San Francisco-based AI start-up. A critical date for shareholders of Capri Holdings (CPRI) is October 25 when they will vote on Tapestry’s (TPR) acquisition offer.

Stock Market Instability and Quant Ratings

Stocks such as Groupon (GRPN), Zynex (ZYXI), and C3.ai (AI) are attracting high levels of short interest, with trading volume in options rising for electric vehicle producers like Tesla (TSLA) and Nikola (NKLA). The list of overbought stocks, as per the 14-day relative strength index, includes Acurx Pharmaceuticals (ACXP), PCTEL (PCTI), and MMTec (MTC), while Aldeyra (ALDX), Seres Corporation therapeutics(MCRB) and Redfin Corporation(RDFN) are among the most oversold.

In terms of recent quant ratings updates, Berkshire Hathaway’s stock(BRK.B) was upgraded from ‘Hold’ to ‘Strong Buy’, Qorvo’s(QRVO) changed status to get a rating update ‘Buy’ from ‘Hold’, while ContextLogic(WISH)’s rating fell to ‘Sell’ from ‘Hold’. It would be prudent for investors to keep an eye on stocks bearing Seeking Alpha’s highest rated Quant Ratings.