In the new trading week, investors are likely to focus in particular on the publication of new US inflation data, which is expected on Friday afternoon.
The combination of easing concerns about a potential US banking crisis and hopes for a solution to the trade dispute between Washington and Beijing are tipping the scales. Although the cocktail of worries from the past trading week is out of sight and thus out of mind for stock market participants for the moment, it could boil up again at any time.
Dow Jones Industrial Average Index
Concerns about possible US banking crisis and escalation in customs dispute subside - uncertainty likely to remain
Developments in the trade dispute between the US and China and the latest concerns about a potential US banking crisis are likely to remain key topics of discussion on the markets.
Last Friday, US President Donald Trump himself described his threat to impose tariffs of 100% on Chinese imports as unacceptable, thus easing tensions. However, investors should keep an eye out for any bad news regarding a potential banking crisis in the United States.
Purchasing managers on both sides of the Atlantic and US inflation data in focus on Friday
Overall, the economic calendar remains manageable due to the ongoing partial government shutdown in the United States.
The first estimates of purchasing managers (HCOB) for the manufacturing, services and „total“ sectors for the Federal Republic of Germany are on the daily agenda on Friday at 09:30.
The counterparts for the eurozone follow at 10:00 a.m. and for the US (S&P Global) at 3:45 p.m.
In addition to US consumer prices, the core rate of inflation is also expected, which excludes the drivers energy and food (14:30).
US monetary policy likely to remain an important topic - hopes for interest rate cuts
In this context, investors are hoping that the expected publication of fresh price data for September will provide important clues as to the future shape of US monetary policy, especially as uncertainty about the actual publication of statistics is likely to remain in view of the ongoing US government shutdown.
According to the so-called „Fed Watch Tool“, there is currently a 98.9% chance of a rate cut of a quarter of a percentage point at next week's meeting (October 29). There is a 96.1% chance that the US monetary authority will lower interest rates by another 25 basis points at the last scheduled meeting of the current year (December 10).
The prospect of falling capital market interest rates in the USA could set the pace for the equity markets until the end of the year.
Meanwhile, consumer confidence (University of Michigan) is expected at 16:00.
US reporting season continues to pick up speed - possible stimulus conceivable
In the reporting season, Coca-Cola (ISIN: US1912161007), General Motors (ISIN: US37045V1008) and Netflix (ISIN: US64110L1061) are scheduled to report their figures for the past financial quarter on Tuesday. Tesla (ISIN: US88160R1014) will report on Wednesday and Ford (ISIN: US3453708600) and Intel (ISIN: US4581401001) on Thursday.
