We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Q3 Season Ramps Up This Week, Results Due for META, TSLA
Keep an Eye on Bond Rates as a Viable Alternative to Equities
Emerging-Market Status Threatened for Indonesia, Turkey
What happens across this Global Week Ahead?
Q3 earnings season is shifting up a gear in the U.S., and
Mainland China is about to deliver a deluge of macro data
Giving febrile markets plenty more to ponder after the latest bouts of volatility in bonds and AI stocks
Elsewhere:
Central bankers in Indonesia and Turkey have been given headaches by global index provider MSCI, while
Voters in Brazil gear up to choose their next president
Next are Reuters’ five world market themes, re-ordered for equity traders—
(1) Q3 Earnings Season Is Here
U.S. earnings season picks up in the coming days, with investors focused on Meta Platforms (META - Free Report) and other AI-focused companies as technology shares wobble.
Meta, due on Wednesday, is one of several hyper-scalers whose massive spending on AI data centers and infrastructure has been a big driver of investment.
With concerns mounting over financing for the AI buildout, investors want more detail on expected returns from those huge outlays.
Reports from semiconductor companies Lam Research (LRCX - Free Report) and Texas Instruments (TXN - Free Report) will offer another view of the AI boom, as will results from Elon Musk's TeslaTSLA.
S&P500 earnings are expected to have climbed more than +30% in the third quarter, according to LSEG IBES, continuing a robust year for corporate profits.
(2) Stock & Bond Returns Correlation a Focus
For months, as energy and food prices surged amid the Iran war, bonds lost their shock-absorber status as investors jacked up estimates of how high interest rates might need to go.
Add near-chronic concern about developed-world governments' finances, and bonds seemed to offer little safe-haven comfort while still struggling to rival super-charged equities.
The correlation between stocks and bond yields has now turned positive for Europe and the U.S., meaning yields are more likely to fall when stocks fall.
It had been overwhelmingly negative this year, with yields rising as stocks fell, undermining bonds' traditional role as a haven during equity selloffs.
This relationship fluctuates, but this year, the correlation of U.S. stocks and bond yields in March hit its most negative since at least the 1990s, while for European assets, it reached its most negative on record in September.
(3) MSCI Proposed Stripping Indonesia of EM Status. Turkey Put on Notice, Too
Central bankers in Indonesia and Turkey already have plenty on their plates.
Now they have an MSCI headache, too.
Indonesia's central bank meets on Wednesday, while Turkish policymakers gather on Thursday, against a backdrop of high energy prices, rising borrowing costs, AI-driven market disruption and geopolitical uncertainty.
MSCI has proposed stripping Indonesia of its emerging-market (EM) status and removing it from a suite of indexes, a move that risks triggering heavy outflows and raising pressure on policymakers to hike from 5.75% rather than hold.
MSCI has also put Turkey on notice, warning of a potential downgrade if market reforms fall short by mid-2027, another complication for policymakers expected to keep cutting rates from 37%.
(4) The Week Starts with a Mainland China Macro Data Deluge
A health check on the Chinese economy is due on Monday, with third-quarter GDP alongside September retail sales, industrial output and fixed-asset investment data.
The latest loan prime rate follows on Tuesday and is expected to stay put after more than a year on hold.
Strong global demand for semiconductors, clean technology and other manufactured goods has kept China's economy ticking, even as domestic demand remains patchy and higher energy costs bite.
Exports have held up despite China's delicate trade balancing act with the U.S. and E.U.
The latest trade figures showed Chinese exports surging well beyond analysts' estimates, putting the country on track for another $1 trillion trade surplus this year after crossing the threshold for the first time in 2025.
The flip side: the export boom could add to trade tensions with major partners.
(4) Brazil’s Presidential Runoff Happens on October 25th. Campaigning Underway
Brazil's October 25th presidential runoff is keeping markets on edge after Flávio Bolsonaro's surprise first-round lead sent stocks up 7.7% and the real almost 4% higher.
A new Quaest poll puts Bolsonaro on 46% versus Luiz Inácio Lula da Silva's 44%, a technical tie.
Investors are betting a Bolsonaro win would bring tighter fiscal policy, but much may already be priced in. His choice of economic team and signs of credible reform could fuel further gains.
A Lula comeback, meanwhile, could put that rally into reverse, with the real, longer-dated bonds and state-controlled companies among the most exposed. A more conservative Congress, though, could limit how far Lula could shift policy.
Zacks #1 Rank (STRONG BUY) Stocks
This week, I picked three North East Asian Zacks #1 (STRONG BUY) large caps. One from South Korea. Two from Japan.
(1) KB Financial Group (KB - Free Report) : This is a $118 a share Foreign bank stock, with a market cap of $41.5B.
It is found in the Zacks Banks-Foreign industry. The stock holds a Zacks Value score of D, a Zacks Growth score of F, and a Zacks Momentum score of A.
F12M P/E: 8.4.
Image Source: Zacks Investment Research
Kookmin Bank, formerly KB Financial Group Inc., is a commercial bank in Korea.
On the asset side, the company provides credit and related financial services to individuals and small and medium sized enterprises and, to a lesser extent, to large corporate customers.
On the deposit side, it provides a range of deposit products and related services to both individuals and enterprises of all sizes.
(2) Otsuka Holdings (OTSKY - Free Report) : This is a $38 a share Japanese drug stock, with a market cap of $38.7B.
It is found in Zacks Medical-Drugs industry. The stock holds a Zacks Value score of B, a Zacks Growth score of D, and a Zacks Momentum score of F.
F12M P/E: 16.2.
Otsuka Holdings Co. Ltd. is a pharmaceutical company.
It manufactures, sells, imports and exports pharmaceutical products, clinical testing, and medical equipment, for intractable diseases.
Otsuka Holdings Co. Ltd. is based in Tokyo, Japan.
(3) Disco Corp. (DSCSY - Free Report) : This is an $35 a share manufacturing stock, with a market cap of $38.7B.
It is found in the Zacks Manufacturing-Material Handling industry. The stock holds a Zacks Value score of F, a Zacks Growth score of C, and a Zacks Momentum score of D.
F12M P/E: 31.7.
Disco Corporation manufactures and sells precision cutting, grinding and polishing machines primarily in Japan and internationally.
Its precision machines include dicing saws, laser saws, grinders, polishers, wafer mounters, die separators, surface planers, and waterjet saws, as well as products for dicing before grinding process and package singulation.
The company also manufactures and sells precision diamond abrasive tools; and offers processing services.
Disco Corporation is headquartered in Tokyo, Japan.
Key Global Macro
This looks to be a quiet week for global macro prints.
On Sunday, Mainland China GDP for Q3 came out, surpassing consensus expectations at +4.5% versus +4.4% estimated. The prior Q2 reading was +4.3% y/y.
On Monday, the U.K. ILO unemployment rate for August matched the prior reading at +4.9%.
On Tuesday, the U.K. CPI for September comes out. The prior broad CPI reading was +3.1% y/y. The core CPI reading was +2.6% y/y.
On Wednesday, U.S. weekly mortgage applications come out. The prior weekly reading was down -2.7%.
On Thursday, U.S. weekly initial jobless claims come out. I see a low 199K is the prior reading.
On Friday, the Euro Area HCOB manufacturing PMI comes out for October. I see 52.9 was the September reading.
Conclusion
On Oct. 14th, Zacks Research Director Sheraz Mian shared his first Q3 earnings update.
Key points:
(1) Total Q3 earnings for the 32 S&P500 members that have reported results already?
They are up +52.5% from the same period last year, on +15.8% higher revenues.
81.3% beat EPS estimates and 71.9% beat revenue estimates.
(2) The EPS and revenue beats percentages at this admittedly early stage in the Q3 reporting cycle are tracking modestly below what we had seen from this same group of companies in other recent periods.
The reported earnings and revenue growth rates have been boosted by outsized gains at Micron, with the Q3 growth comparisons tracking modestly unfavorably with other recent periods when the Micron numbers are excluded.
(3) The relatively underwhelming start to the Q3 reporting cycle notwithstanding, the overall setup remains favorable, with earnings growth expected to be in the double digits for the 8th consecutive quarter.
The growth momentum is broad-based, with 14 of the 16 Zacks sectors expected to enjoy positive earnings growth and the outlook steadily improving.
(4) Excluding the Tech sector’s substantial contribution?
Q3 earnings for the rest of the S&P 500 index would be up +14.6% (vs. +24.6% otherwise).
Excluding the Energy sector?
The aggregate growth rate would decline to +20.3%.
That’s all from me!
Best of luck, in trading & investing.
John Blank, PhD. Zacks Chief Equity Strategist and Economist
View the Zacks #1 Rank List
Image: Bigstock
Q3 Earnings Reports Gear Up: Global Week Ahead
Key Takeaways
What happens across this Global Week Ahead?
Elsewhere:
Next are Reuters’ five world market themes, re-ordered for equity traders—
(1) Q3 Earnings Season Is Here
U.S. earnings season picks up in the coming days, with investors focused on Meta Platforms (META - Free Report) and other AI-focused companies as technology shares wobble.
Meta, due on Wednesday, is one of several hyper-scalers whose massive spending on AI data centers and infrastructure has been a big driver of investment.
With concerns mounting over financing for the AI buildout, investors want more detail on expected returns from those huge outlays.
Reports from semiconductor companies Lam Research (LRCX - Free Report) and Texas Instruments (TXN - Free Report) will offer another view of the AI boom, as will results from Elon Musk's Tesla TSLA.
Other high-profile results in the coming days include Netflix (NFLX - Free Report) , Procter & Gamble (PG - Free Report) and GE Aerospace (GE - Free Report) .
S&P500 earnings are expected to have climbed more than +30% in the third quarter, according to LSEG IBES, continuing a robust year for corporate profits.
(2) Stock & Bond Returns Correlation a Focus
For months, as energy and food prices surged amid the Iran war, bonds lost their shock-absorber status as investors jacked up estimates of how high interest rates might need to go.
Add near-chronic concern about developed-world governments' finances, and bonds seemed to offer little safe-haven comfort while still struggling to rival super-charged equities.
The correlation between stocks and bond yields has now turned positive for Europe and the U.S., meaning yields are more likely to fall when stocks fall.
It had been overwhelmingly negative this year, with yields rising as stocks fell, undermining bonds' traditional role as a haven during equity selloffs.
This relationship fluctuates, but this year, the correlation of U.S. stocks and bond yields in March hit its most negative since at least the 1990s, while for European assets, it reached its most negative on record in September.
(3) MSCI Proposed Stripping Indonesia of EM Status. Turkey Put on Notice, Too
Central bankers in Indonesia and Turkey already have plenty on their plates.
Now they have an MSCI headache, too.
Indonesia's central bank meets on Wednesday, while Turkish policymakers gather on Thursday, against a backdrop of high energy prices, rising borrowing costs, AI-driven market disruption and geopolitical uncertainty.
MSCI has proposed stripping Indonesia of its emerging-market (EM) status and removing it from a suite of indexes, a move that risks triggering heavy outflows and raising pressure on policymakers to hike from 5.75% rather than hold.
MSCI has also put Turkey on notice, warning of a potential downgrade if market reforms fall short by mid-2027, another complication for policymakers expected to keep cutting rates from 37%.
(4) The Week Starts with a Mainland China Macro Data Deluge
A health check on the Chinese economy is due on Monday, with third-quarter GDP alongside September retail sales, industrial output and fixed-asset investment data.
The latest loan prime rate follows on Tuesday and is expected to stay put after more than a year on hold.
Strong global demand for semiconductors, clean technology and other manufactured goods has kept China's economy ticking, even as domestic demand remains patchy and higher energy costs bite.
Exports have held up despite China's delicate trade balancing act with the U.S. and E.U.
The latest trade figures showed Chinese exports surging well beyond analysts' estimates, putting the country on track for another $1 trillion trade surplus this year after crossing the threshold for the first time in 2025.
The flip side: the export boom could add to trade tensions with major partners.
(4) Brazil’s Presidential Runoff Happens on October 25th. Campaigning Underway
Brazil's October 25th presidential runoff is keeping markets on edge after Flávio Bolsonaro's surprise first-round lead sent stocks up 7.7% and the real almost 4% higher.
A new Quaest poll puts Bolsonaro on 46% versus Luiz Inácio Lula da Silva's 44%, a technical tie.
Investors are betting a Bolsonaro win would bring tighter fiscal policy, but much may already be priced in. His choice of economic team and signs of credible reform could fuel further gains.
A Lula comeback, meanwhile, could put that rally into reverse, with the real, longer-dated bonds and state-controlled companies among the most exposed. A more conservative Congress, though, could limit how far Lula could shift policy.
Zacks #1 Rank (STRONG BUY) Stocks
This week, I picked three North East Asian Zacks #1 (STRONG BUY) large caps. One from South Korea. Two from Japan.
(1) KB Financial Group (KB - Free Report) : This is a $118 a share Foreign bank stock, with a market cap of $41.5B.
It is found in the Zacks Banks-Foreign industry. The stock holds a Zacks Value score of D, a Zacks Growth score of F, and a Zacks Momentum score of A.
F12M P/E: 8.4.
Image Source: Zacks Investment Research
Kookmin Bank, formerly KB Financial Group Inc., is a commercial bank in Korea.
On the asset side, the company provides credit and related financial services to individuals and small and medium sized enterprises and, to a lesser extent, to large corporate customers.
On the deposit side, it provides a range of deposit products and related services to both individuals and enterprises of all sizes.
(2) Otsuka Holdings (OTSKY - Free Report) : This is a $38 a share Japanese drug stock, with a market cap of $38.7B.
It is found in Zacks Medical-Drugs industry. The stock holds a Zacks Value score of B, a Zacks Growth score of D, and a Zacks Momentum score of F.
F12M P/E: 16.2.
Otsuka Holdings Co. Ltd. is a pharmaceutical company.
It manufactures, sells, imports and exports pharmaceutical products, clinical testing, and medical equipment, for intractable diseases.
Otsuka Holdings Co. Ltd. is based in Tokyo, Japan.
(3) Disco Corp. (DSCSY - Free Report) : This is an $35 a share manufacturing stock, with a market cap of $38.7B.
It is found in the Zacks Manufacturing-Material Handling industry. The stock holds a Zacks Value score of F, a Zacks Growth score of C, and a Zacks Momentum score of D.
F12M P/E: 31.7.
Disco Corporation manufactures and sells precision cutting, grinding and polishing machines primarily in Japan and internationally.
Its precision machines include dicing saws, laser saws, grinders, polishers, wafer mounters, die separators, surface planers, and waterjet saws, as well as products for dicing before grinding process and package singulation.
The company also manufactures and sells precision diamond abrasive tools; and offers processing services.
Disco Corporation is headquartered in Tokyo, Japan.
Key Global Macro
This looks to be a quiet week for global macro prints.
On Sunday, Mainland China GDP for Q3 came out, surpassing consensus expectations at +4.5% versus +4.4% estimated. The prior Q2 reading was +4.3% y/y.
On Monday, the U.K. ILO unemployment rate for August matched the prior reading at +4.9%.
On Tuesday, the U.K. CPI for September comes out. The prior broad CPI reading was +3.1% y/y. The core CPI reading was +2.6% y/y.
On Wednesday, U.S. weekly mortgage applications come out. The prior weekly reading was down -2.7%.
On Thursday, U.S. weekly initial jobless claims come out. I see a low 199K is the prior reading.
On Friday, the Euro Area HCOB manufacturing PMI comes out for October. I see 52.9 was the September reading.
Conclusion
On Oct. 14th, Zacks Research Director Sheraz Mian shared his first Q3 earnings update.
Key points:
(1) Total Q3 earnings for the 32 S&P500 members that have reported results already?
They are up +52.5% from the same period last year, on +15.8% higher revenues.
81.3% beat EPS estimates and 71.9% beat revenue estimates.
(2) The EPS and revenue beats percentages at this admittedly early stage in the Q3 reporting cycle are tracking modestly below what we had seen from this same group of companies in other recent periods.
The reported earnings and revenue growth rates have been boosted by outsized gains at Micron, with the Q3 growth comparisons tracking modestly unfavorably with other recent periods when the Micron numbers are excluded.
(3) The relatively underwhelming start to the Q3 reporting cycle notwithstanding, the overall setup remains favorable, with earnings growth expected to be in the double digits for the 8th consecutive quarter.
The growth momentum is broad-based, with 14 of the 16 Zacks sectors expected to enjoy positive earnings growth and the outlook steadily improving.
(4) Excluding the Tech sector’s substantial contribution?
Q3 earnings for the rest of the S&P 500 index would be up +14.6% (vs. +24.6% otherwise).
Excluding the Energy sector?
The aggregate growth rate would decline to +20.3%.
That’s all from me!
Best of luck, in trading & investing.
John Blank, PhD.
Zacks Chief Equity Strategist and Economist