Wall Street is having a good quarter, the Bitcoin ETF era is coming, and retail sales numbers are due.
Great quarter, guys
It’s been a very good week for banks reporting earnings with
with Morgan Stanley,
Bank of America Corp. and
Citigroup Inc. posting better-than-expected results. The beats helped drive the S&P 500 Index to its
best day since March. The heads of the big banks that have reported so far see little sign the deal-making windfall will slow down any time soon. This morning, it is turn of Goldman Sachs Group Inc., with analysts expecting a similarly strong performance.
Crypto
It’s also been a good week for cryptocurrencies. The Securities and Exchange Commission looks poised to soon allow the first U.S. Bitcoin futures exchange-traded fund to begin trading. Russian President Vladimir Putin said he accepted crypto’s role in making payments. Positive developments helped push Bitcoin to within a couple of dollars of $60,000 this morning. On the negative front, there is clear evidence that China’s crackdown is significantly slowing trading in the region, while MSCI Inc. says the increasing exposure among traditional investors to the asset class is opening them to new risks.
Sales, costs
This morning’s retail sales data for September is expected to show a small drop from August in the headline number as purchases of big-ticket items such as cars fall. Core sales excluding auto and gas are forecast to stay in positive territory. The mixed performance from consumers and rising inflation is all seen as a drag on growth. Speaking of inflation, the price of oil and basic materials continue to push higher, with international benchmark Brent rising above $85 this morning for the first time since 2018, while base metals extended gains after climbing to a record high yesterday.
Markets rise
Equity investors continue to concentrate on the positive news from earnings. Overnight the MSCI Asia Pacific Index climbed 1.2% while Japan’s Topix index closed 1.9% higher. In Europe the Stoxx 600 Index had added 0.4% by 5:50 a.m. Eastern Time with banks leading the gains. S&P 500 futures pointed to more green at the open, the 10-year Treasury yield was at 1.551% and gold dropped.
Coming up...
October Empire Manufacturing accompanies retail sales data at 8:30 a.m. The latest University of Michigan sentiment reading is at 10:00 a.m., with August business inventories also at that time. The Baker Hughes rig count is at 1:00 p.m., with the number expected to tick higher as production in the Permian surges. As well as Goldman, we also get results from Charles Schwab Corp., Prologis Inc. and Sensient Technologies Corp.
What we've been reading
Here's what caught our eye over the last 24 hours.
And finally, here’s what Katie’s interested in this morning
There’s no shortage of inflation opinions among the chief executives at some of the biggest U.S. banks. Here are a smattering of headlines that crossed the Terminal this week as the financial heavyweights kicked off the third-quarter reporting season:
MOYNIHAN SAYS INFLATION ISN’T TEMPORARY, ‘IT’S PERMANENT’
MORGAN STANLEY CEO GORMAN SAYS INFLATION IS ‘NOT TRANSITORY’
DIMON: INFLATION HAS TRANSITORY AND PERMANENT COMPONENTS
Which, taken together, are fairly representative of what you’d hear if you asked three different Wall Street analysts for their take on inflation. But for good measure, Goldman Sachs Group President John Waldron also said this week that inflation is not transitory -- a sentiment echoed by BlackRock Inc. CEO Larry Fink, who added it’s “definitely not transitory.”
But in particular, Morgan Stanley’s Gorman seems passionate about what policymakers should do next.
“You’ve got to prick this bubble a little bit,” Gorman said Thursday in an interview with Bloomberg Television. “Money is a bit too free and available right now.”
Gorman has a timeframe in mind, too -- an aggressive one.
“I’ve been much more hawkish. I would have brought rates up. Certainly by the first quarter of next year, I’d start moving,” Gorman said.
Which would imply tapering bond purchases while simultaneously hiking rates. A Gorman-run Fed -- the mind runs wild.
Follow Bloomberg's Katie Greifeld on Twitter at @kgreifeld
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