Earnings Reports: The earning season is coming in October, which usually increases market volatility. Expect markets to become more volatile not only next week or in October but also through the end of the year. The information shared by companies during the multi-week reporting season will set the tone for the market for the next several months. Economists predict that the third quarter will be an earning period with more uncertainty than the Q1 and Q2.

Economic Indicators: Investors are looking at how the rise in delta variant Covid-19 cases has influenced consumer spending and consumer confidence. They are also discussing how the delta variant has affected economic growth at large. Consumer spending and consumer confidence reports will also help understand supply chain issues and rising inflation.

Geopolitical Developments: China will continue being in focus, considering how much its activities and Evergrande crisis have rattled the markets lately. Along with known issues, such as China’s crackdown on the tech industry and cryptocurrencies, any other geopolitical event can affect US stock prices, especially now, when markets are volatile.

RBI’s Monetary Policy Review: At the end of this week, investors’ focus will shift to RBI’s monetary policy review due on October 8. Analysts foresee that MPC will keep the repo rate unchanged. Yet they also predict a hike in the reverse repo rate. This means that there will be a squeeze on liquidity. Economists further expect the central bank to start normalizing the loose liquidity. The problem is that economic recovery around the world is speeding up, which means that excess liquidity begins to weigh heavily on banks. Steps are required to ease the burden.

Zee Entertainment Enterprises:  This company will be in focus next week. You should watch further development of the tussle. Note that on Friday, Zee Entertainment Enterprises turned down its largest shareholder’s request for an EGM, claiming that it was illegitimate. There expected to be further reaction from Invesco Developing Markets. Keep also a close eye on power companies. They are expected to continue gaining. Power companies are experiencing strong demand revival. There might also be major reforms in the power sector in the coming months. This week the BSE Power index jumped more than 5%.

US Indices:  As known, markets were notoriously low in September. The S&P 500 plummeted 4.8%, thus ending the month on the lowest point since March 2020. The Dow Jones and Nasdaq, too, posted their weakest monthly reports in September 2021. And yet, analysts say that, despite volatility, equities are still excellent for investments. You are advised to put money in them if you are looking for profits and a second income. Remember that 42% of companies in the S&P 500 are paying a dividend yielding more than the rate for the benchmark US Treasury note, which is about 1.5%. Even if volatility continues overtaking the markets through October, you will still earn money by investing in equities.

We will be back with more news and advice.
Have productive trading!
The Xtrade’s team.