This will be a big week for technology earnings with Amazon (AMZN), Apple (AAPL), Meta (META) and Microsoft (MSFT) all reporting on Wednesday and Thursday. Of course, the biggest news on Wednesday will be the Federal Open Market Committee (FOMC) statement, which is expected to be dovish and signal another key interest rate cut at its December FOMC meeting.
The Asia-Pacific Economic Cooperation (APEC) conference commences on Friday in South Korea, and more trade deals are expected to be announced. President Trump visited Malaysia and Japan prior to the APEC conference. The Trump Administration said it reached trade agreements with Malaysia and Cambodia, and frameworks for deals with Thailand and Vietnam during President Trump’s Malaysia trip.
Treasury Secretary Scott Bessent also said that “I think we have a very successful framework for the leaders to discuss on Thursday” when President Trump meets with Chinese President Xi. Chinese Vice Commerce Minister Li Chenggang separately told reporters that “the two sides have reached a preliminary consensus” on possible solutions for issues that strained relations between China and the U.S. It is clear that the U.S. wants China to resume buying soybeans and other U.S. agricultural products.
Interestingly, Fed Governor Christopher Waller referenced the private payroll statistics in a speech, and ADP has decided to stop providing the with its data after doing so for several years. Governor Waller is one of five candidates that Treasury Secretary Scott Bessent said are being considered to be nominated to become the next Fed Chairman. Since Governor Waller foresaw the problems in the labor market well before the Labor Department’s big downward revisions, his credibility has soared since he is better at anticipating economic events rather than reacting to them too late. ADP also has downward revisions to its private payroll data and has reported negative job growth in three of the past four months.
The last week of October is a seasonally strong period, and an early “January effect” appears to be underway. There is no doubt that the breadth and power of the overall stock market are improving, since we are now in the midst of the strongest earnings announcement season in the past four years, according to Bloomberg. Barron’s also has an article entitled “Stocks Are Set to Sizzle After a Weekend of Trade Moves.” One thing that we know about President Trump is that he is very transactional when he goes on overseas trips, so it is obvious that the grand finale of his Asian trip might be a trade deal with China and possibly other nations like South Korea.