Investing.com -- Earnings season kicks into gear with JPMorgan, Goldman Sachs, Citi and Wells Fargo all reporting before the bell. Meanwhile, Asian and European markets get a boost from some more positive sounds out of Beijing and Brussels, while Turkey's financial markets shrug off "obliteration" from President Trump's sanctions. Here's what you need to know in financial markets on Tuesday, 15th October.
1. A barrage of bank earnings
The third-quarter earnings season swings into gear big time as Wall Street’s big banks report their numbers. JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C), Wells Fargo (NYSE:WFC) and Goldman Sachs (NYSE:GS) are all expected to report before the bell.
Charles Schwab (NYSE:SCHW) and Blackrock (NYSE:BLK), meanwhile, will also report, only a week after the U.S.’s biggest retail brokerages all joined a race to the bottom by cutting commissions on most trades in U.S. financial instruments to zero.
Johnson & Johnson (NYSE:JNJ) is also due to report, while UnitedHealth (NYSE:UNH) got the ball rolling with revenue and earnings slightly ahead of expectations.
2. Chinese, European economies stutter
China’s economy continued to struggle, with fresh data showing producer prices dropping 1.2% on the year in September. That’s the biggest drop since 2016 and a further indication of factories being hit by the country’s trade dispute with the U.S. Consumer prices, meanwhile, rose at their highest rate in six years, thanks largely to the continued scarcity of pork due to the Asian swine flu epidemic.
Beijing has instructed its central bank to keep credit to companies flowing to cope with the slowdown. Total social financing, the country’s broadest measure of credit, rose much faster than expectations in September, while yuan lending rose 12.5% on the year.
In Europe, meanwhile, Brexit concerns finally caught up with the U.K.’s labor market, causing employment to fall by 56,000 in the three months through August. Average earnings growth (including bonuses) also slowed from a multi-year high. Germany’s ZEW index, the first big sentiment indicator of the month out of Europe, fell by less than expected, although the current conditions subindex hit its lowest level since 2010.
3. Stocks set to open higher
U.S. stock markets are indicated higher ahead of the opening shots of an earnings season which is expected to see the majority of companies report declining profits in year-on-year terms.
By 6:15 AM ET (1015 GMT), Dow futures were up 89 points or 0.3%, while S&P 500 Futures and Nasdaq 100 futures were also up 0.3%.
Asian and European markets were supported by a confirmation from China that the U.S.’s account of Friday’s handshake deal on trade was accurate, while European markets also benefited from comments by the EU’s top Brexit negotiator Michel Barnier, who said that a deal to avoid a disorderly Brexit at this week’s summit with the U.K. was still possible, if difficult.
4. Turkish markets recover after mild sanctions
Turkey’s currency and stock and bond markets bounced after President Donald Trump failed to follow through on threats to “obliterate” its economy with sanctions if it stepped out of line in Syria.
The U.S. doubled tariffs on imports of steel from Turkey to 50%, and applied sanctions to several Turkish officials, including the defense, energy and interior ministers, as well as the Turkish government’s defence and energy departments.
The lira strengthened as much as 1% before paring gains to 0.2%, trading at 5.9142 per dollar as of 11:48 a.m. in Istanbul. Turkey’s main stock index climbed 1.5%. The gains only partly unwound losses made in anticipation of the U.S.’s measures, however.
The U.S. administration is calling for a ceasefire in Syria, given the heightened risk of direct clashes between Turkish forces and those of President Assad, who has temporarily reconciled himself with the Kurdish rebels targeted by Ankara.
5. Warren's chance to stake her claim
Democratic presidential hopefuls hold their latest televised debate at 8 PM ET (2200 GMT). It's an opportunity for Sen. Elizabeth Warren to cement her recent gains in the polls at the expense of former vice-president Joe Biden and Bernie Sanders, her most formidable rival on the left of the party.
Biden has reportedly warned other candidates against taking up President Trump's accusations of wrong-doing by his son Hunter Biden, who this week said he would no longer serve on the boards of any foreign company.
According to the New York Times, Biden's lead over Warren has shrunk to 3 points. Warren has now leapfrogged Sanders into 2nd place polling an average 23%, compared to Biden's 26% and Sanders' 16%.