Watching for signs of a U.S. consumption slowdown… China’s Q3 GDP also in focus [New York·Shanghai market outlook]

Tesla, Netflix earnings due

China to release industrial production, retail sales and more

The New York market is eyeing third-quarter earnings from U.S. companies, which begin in earnest this week (20~24), and the release of the September U.S. Consumer Price Index (CPI).

First up, Tesla, Netflix, Intel, P&G and Lockheed Martin will report results. However, these companies’ business areas are somewhat removed from the market’s current core themes of artificial intelligence (AI) and the semiconductor industry. For this reason, even if these companies post strong results, it is unlikely the overall market will react sensitively. Conversely, if results are worse than expected, investors may take that as a sign of a consumption slowdown. Since consumption accounts for about 70% of the U.S. economy, the U.S. market is closely linked to consumer spending.

In particular, with signs of a weakening labor market and a continued federal government shutdown, remarks made by management at earnings presentations are bound to attract attention.

Market attention is also focused on the September U.S. CPI to be released on the 18th. The September CPI was originally supposed to be released earlier but was delayed due to the government shutdown. According to financial information provider FactSet, CPI is expected to rise 3.1% year-on-year. On a monthly basis, a slight slowdown to 0.39% is expected.

Core CPI, which excludes the volatile food and energy components, is predicted to record a 0.3% monthly increase and a 3.1% annual increase.

The Shanghai market appears set to probe for direction ahead of this week’s economic indicator releases. China’s National Bureau of Statistics (NBS) is expected to sequentially release September industrial production and retail sales data, as well as third-quarter gross domestic product (GDP) growth around the 20th.

Market consensus favors a somewhat slower Q3 GDP growth rate compared with Q2. These indicators are seen as key data for gauging the speed of China’s domestic demand recovery amid growing concerns about an economic slowdown.

If the results fall short of expectations, hopes for additional stimulus measures could rise; conversely, if they exceed expectations, there is a possibility they could trigger a short-term relief rally in the market.

New York = Park Shin-young, correspondent nyusos@hankyung.com