Weekly Market Outlook: Tesla Kicks Off Big Tech Earnings; U.S. Election Enters Final Stretch

Insights – This week, key economic data includes U.S. September durable goods orders, the University of Michigan’s October Consumer Sentiment Index, and preliminary PMI data from several countries, all to be released on Thursday. China and Canada will announce interest rate decisions on Monday (21st) and Wednesday (23rd), respectively. On Thursday, the Federal Reserve will release its Beige Book, providing insights into policy direction. Tesla will report Q3 earnings on Thursday, with analysts expecting $25.42 billion in revenue, up 9% year-over-year. Other key earnings include Boeing, Coca-Cola, GM, and IBM.

Last week, U.S. retail sales in September exceeded expectations, indicating strong consumer spending. The ECB cut rates by 0.25 percentage points to 3.25%, marking its third rate cut this year. Moveover, U.S. bank earnings showed strong net interest income, boosting wealth and asset management businesses.

Tesla to Release Q3 Earnings

Tesla will release its Q3 earnings on Wednesday, with Wall Street expected to refocus on the company’s fundamentals. Some investors were disappointed by the company’s robot launch earlier this month, which was highly anticipated but criticized for lacking concrete details. 

Analysts estimate EPS of 0.59, down from 0.66 in the same period last year, with revenue expected to reach 25.5billion, up from 25.1 billion last year. Gross margins are expected to rise from 17.9%. 

Over the past few weeks, Tesla’s stock has been under pressure, falling by about 14% in October through last Friday. Options pricing suggests that Tesla’s stock could move by around 6.3% following the Q3 earnings release.

Bank of Canada Expected to Cut Rates by 50 Basis Points

The Bank of Canada’s rate decision meeting will be held on October 23. Most major banks, including National Bank of Canada, expect policymakers to cut the benchmark overnight rate by 50 basis points. Additionally, the central bank’s final rate decision of the year is scheduled for December 11. 

In September, Canada’s CPI fell to 1.6%, marking the first time in over three years that it dipped below the 2% target. However, excluding housing costs, the index was only 0.4% last month, below the central bank’s target range of 1%-3%. 

Bank of Canada Governor Tiff Macklem previously stated that policymakers are “prepared to take bigger steps.” The central bank has made significant progress in curbing inflation, with the inflation rate falling to a three-and-a-half-year low of 1.6% in September.

U.S. Election Enters Final Stretch

With just about two weeks left until the U.S. presidential election, the race between the two candidates has heated up as both enter the final stretch. However, current poll data suggests that former President Donald Trump is gaining the upper hand. 

According to a prediction model by The Hill/Decision Desk HQ, Trump’s chances of winning surpassed those of Vice President Kamala Harris for the first time on October 19. The model shows Trump with a 52% chance of winning, compared to Harris’s 42% till Monday. 

Last week, billionaire investor Stanley Druckenmiller, founder of Duquesne Family Office, said that over the past 12 days, the market seems “increasingly convinced that Trump will win,” noting that this sentiment can be seen in the performance of bank stocks and the cryptocurrency market.

Key Economic Event

Tuesday: Kansas City Fed President George (2025 FOMC voter) and San Francisco Fed President Daly (2024 FOMC voter) speak.

Wednesday: Fed Governor Bowman, Bank of Canada Governor Macklem, and ECB President Lagarde speak.

Thursday: Fed releases Beige Book, Bank of England Governor Bailey and Bank of Japan Governor Ueda speak.

Key U.S. Earnings

Monday: Nucor (NUE), Logitech (LOGI)

Tuesday: Verizon (VZ), GM (GM), 3M (MMM), Texas Instruments (TXN)

Wednesday: Boeing (BA), AT&T (T), Tesla (TSLA), IBM (IBM)

Thursday: American Airlines (AAL), Nasdaq OMX (NDAQ), Western Digital (WDC)