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Three of the Biggest AI Companies Report Q3 Numbers This Week
Global Central Banks Meet This Week, As Well
Israelis Take to the Polls and U.K. Announces a New Budget
What happens across this Global Week Ahead?
An eye-catching week is in store as:
Rate-setters at the Federal Reserve, European Central Bank and Bank of Japan announce policy decisions, while
Investors will gauge whether results from Alphabet, Amazon, and Microsoft can fuel the next leg of the AI rally
An election in Brazil, a gathering of China's top leadership, and a closely-watched British budget add political risk to the agenda.
Next are Reuters’ five world market themes, re-ordered for equity traders—
(1) Hyper-scalers Report Earnings
A big week for US corporate earnings will be headlined by reports from three of the largest companies at the heart of the huge AI capital investment theme that has driven up equities.
Alphabet (GOOGL - Free Report) , Microsoft (MSFT - Free Report) and Amazon (AMZN - Free Report) — three of the so-called hyper-scalers — will post results at a time investors are becoming wary of the risks of the spending on data centers.
The week will be critical to determining if the third quarter lived up to high expectations for U.S. profit growth, with about one-third of S&P500 (SPX), companies reporting.
Other high-profile firms set to report include drugmaker Eli Lilly (LLY - Free Report) , oil majors Exxon (XOM - Free Report) and Chevron (CVX - Free Report) , and industrial equipment giant Caterpillar (CAT - Free Report) .
(2) A Week Packed Full with Major Central Bank Meetings
It's a packed week for central banks.
The Fed, Bank of Canada and Reserve Bank of New Zealand meet on Wednesday, the ECB on Thursday, and the BOJ a day later.
The Fed, ECB and BOJ face no immediate pressure to hike rates after tightening last month.
Fed Chair Kevin Warsh will be pressed on his view on the rate outlook. The ECB is sure to face questions about surging French borrowing costs that risk becoming a flashpoint, while the BOJ may raise its inflation forecasts in a post-meeting report.
Markets expect Canada and New Zealand to hike rates to contain inflation, with all policymakers grappling with the extent to which high oil will fuel broader price pressures.
(3) On Tuesday, an Israel in Conflict Goes to the Polls
Israel's election on Tuesday is poised to be one of the most consequential in the country's history.
Polls have it as a coin toss, with neither Prime Minister Benjamin Netanyahu's Likud bloc nor an opposition centered around former military chief Gadi Eisenkot expected to win a majority, raising the prospect of lengthy coalition negotiations.
Yet for markets, it also comes after an extraordinary rally in Israeli assets.
Since 2023's October 7 attacks, the Tel Aviv stock market has surged more than +135%, while the shekel is up a world-beating +25%.
Analysts are quick to point out the AI boom has been key, given Israel's tech expertise, and will remain so.
But investors also see the potential for tensions to be gradually dialed down in the longer term if Eisenkot and his allies can win out.
(4) A U.K. Budget Gets Announced
British finance minister John Healey will announce his first budget on Wednesday, when he will try to offer some relief from higher energy prices to households, but without unsettling the bond market by ramping up borrowing.
That means Healey may have to accept a narrowing of his room for maneuver to meet his fiscal rules. Analysts polled by Reuters think he can allow his headroom to almost halve to around £15 billion ($20 billion) without spooking the market.
Banks might bear the brunt of tax increases, and the share prices of Britain's biggest lenders have fallen in the run-up to Healey's high-profile debut.
Bigger decisions on spending in areas such as defence, public services and welfare are likely to be put off until next year, with Healey hoping the Iran war — and the pressure it is putting on government borrowing costs — may have abated by then.
(5) A Four-day Mainland China Communist Party Plenum Plays Out
China's top leadership gathers in Beijing for the four-day Fifth Plenum from Monday, with officials deliberating on "Advancing Full and Rigorous Party Self-Governance.”
That may sound inward-looking, but official Chinese commentary frames the initiative as an effort to strengthen Party discipline and execution in response to a more challenging external environment, including an increasingly tense relationship with the United States and curbs on China's access to advanced foreign technology.
That's not to say Beijing doesn't face challenges at home too, with domestic demand stuck in a prolonged slump that has proved stubbornly resistant to stimulus efforts.
Zacks #1 Rank (STRONG BUY) Stocks
This week, I picked three very large market cap Zacks #1 (STRONG BUY) stocks.
Two with a Zacks Value score of F, and one with a Zacks Value score of A.
(1) Texas Instruments (TXN - Free Report) : This is a $280 a share semiconductor stock, with a market cap of $260B.
It is found in the Zacks Semiconductor-General industry. The stock holds a Zacks Value score of F, a Zacks Growth score of C, and a Zacks Momentum score of B.
F12M P/E: 33.6.
Image Source: Zacks Investment Research
Texas Instruments is an original equipment manufacturer of analog, mixed signal and digital signal processing (DSP) integrated circuits.
TI has manufacturing and design facilities, including wafer fabrication and assembly/test operations in North America, Asia and Europe.
Management's strategy has been to build assets that would be fully utilized through their lifetimes and outsource any excess demand in peak situations to outside foundries.
Analog products have been categorized into three: high performance analog, high volume analog and logic, and power management.
The Embedded Processing segment includes TI's OMAP, connectivity solutions, non-wireless DSPs and microprocessors.
The Other segment includes smaller semiconductor product lines, such as DLP products, RISC microprocessors and ASICs, calculators and other schoolroom tools, and royalties.
The company's products are sold in industrial, personal electronics, automotive, communications, enterprise and other end-markets.
(2) Shopify (SHOP - Free Report) : This is a $169 a share Internet Services stock, with a market cap of $224.2B.
It is found in Zacks Internet-Services industry. The stock holds a Zacks Value score of F, a Zacks Growth score of B, and a Zacks Momentum score of C.
F12M P/E: 92.0.
Image Source: Zacks Investment Research
Shopify provides a multi-tenant, cloud-based, multi-channel commerce platform for small and medium-sized businesses.
Merchants use the company's software to run business across various sales channels, including web and mobile storefronts, physical retail locations, social media storefronts and marketplaces.
Shopify's platform enables merchants to manage products and inventory, process orders and payments, ship orders, build customer relationships and leverage analytics along with reporting from one integrated back office.
Moreover, Shopify hosts a huge database of merchant and customer interactions.
Merchants leverage this transactional dataset to get meaningful insight into the sales channel growth prospects and consumer behavioral aspects. This improves their ability to target prospective customers more easily, which drives sales growth.
(3) Total Energies (TTE - Free Report) : This is a $91 a share oil & gas stock, with a market cap of $216.6B.
It is found in the Zacks Oil & Gas – Integrated International industry. The stock holds a Zacks Value score of A, a Zacks Growth score of C, and a Zacks Momentum score of A.
F12M P/E: 7.2.
Image Source: Zacks Investment Research
TotalEnergies SE is among the top five publicly traded global integrated oil and gas companies based on production volumes, proved reserves and market capitalization.
The company has operations in countries across five continents.
The company's operations are divided into four main segments:
Exploration & Production; Integrated Gas, Renewables & Power, which spearheads TotalEnergies' ambitions in low-carbon businesses by expanding in downstream gas and renewable energies as well as in energy efficiency businesses.
Refining and Chemicals, which includes all of its bioenergies activities and a new Biofuels division and Marketing & Services, which deals with the supply and sale of petroleum products.
The company also has interests in coal mining and power generation.
Key Global Macro
Mid-week U.S. monetary policy decisions are the top focus this week.??????But don’t neglect the U.S. core PCE rate for SEP, and U.S. Q3 real GDP growth.
On Monday, the German IFO Business Climate for October came in at 92 this morning, ahead of the 90 expected and 89.9 in the prior reading. Current Assessment at 88.8 was below both the 89.9 anticipated and the 89.5 reported for September. Expectations came in higher: 91.6 versus 90.0 expected and 90.4 for the prior month.
On Tuesday, the Reserve Bank of Australia (RBA) Governor Bullock gives s speech.
There is also a Reserve Bank of New Zealand (RNBZ) policy rate decision. Look for a hike to 3.0% from 2.75%.
On Wednesday, the U.S. Fed is likely to hold its 4.0% policy rate. For now. A Chair Warsh press conference occurs too.
On Thursday, the U.S. core PCE inflation rate for SEP comes out. Look for a +3.1% y/y rate, up from +3.0% y/y.
The advance estimate for U.S. Q3 real GDP growth comes out. Look for a stronger +3.0% in Q3, after +2.1% in Q2.
The European Central Bank (ECB) should hold to its 2.65% main refi rate.
The Bank of Japan (BoJ) sets policy too. They are at a 1.25% policy rate now.
On Friday, Euro Area Q3 real GDP growth comes out too. I see +1.1% y/y is consensus, with +1.2% y/y the prior reading.
Conclusion
On Oct. 22nd, Zacks Research Director Sheraz Mian shared a Q3 earnings update.
Key points:
(1) Including the flood of Q3 earnings results from the morning of October 22nd, we now have quarterly results from 112 S&P500 members — or 22.4% of the index’s total membership.
Total earnings for these companies are up +30.9% from the same period last year, on +11.8% higher revenues.
(2) The Q3 earnings and revenue growth pace is tracking modestly below other recent periods, particularly when the reported Q3 growth rates are adjusted for Micron’s (MU - Free Report) blockbuster results.
The reported Q3 earnings and revenue growth rates decline to +13.1% (from +30.9%) and +8.5% (from +11.8%) when Micron is excluded from the reported results.
The Q3 EPS and revenue beats percentages are tracking below what we had seen from this same group of companies in other recent periods.
But otherwise in-line with historical averages.
(4) Given the positive revisions trend in place ahead of the start of the Q3 reporting cycle that had pushed estimates higher, companies will not only need to beat elevated consensus estimates, but also provide positive guidance and outlook for the coming periods.
We are off to a good start on those fronts at this stage, as estimates for Q4-26 and full-year 2026 are maintaining the favorable revisions momentum that was in place before this earnings season got underway.
We will see if this positive trend will remain in place as we move into the heart into the Q3 earnings season in the coming days.
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
The Hyper-scalers Report: Global Week Ahead
Key Takeaways
What happens across this Global Week Ahead?
An eye-catching week is in store as:
An election in Brazil, a gathering of China's top leadership, and a closely-watched British budget add political risk to the agenda.
Next are Reuters’ five world market themes, re-ordered for equity traders—
(1) Hyper-scalers Report Earnings
A big week for US corporate earnings will be headlined by reports from three of the largest companies at the heart of the huge AI capital investment theme that has driven up equities.
Alphabet (GOOGL - Free Report) , Microsoft (MSFT - Free Report) and Amazon (AMZN - Free Report) — three of the so-called hyper-scalers — will post results at a time investors are becoming wary of the risks of the spending on data centers.
The week will be critical to determining if the third quarter lived up to high expectations for U.S. profit growth, with about one-third of S&P500 (SPX), companies reporting.
Other high-profile firms set to report include drugmaker Eli Lilly (LLY - Free Report) , oil majors Exxon (XOM - Free Report) and Chevron (CVX - Free Report) , and industrial equipment giant Caterpillar (CAT - Free Report) .
(2) A Week Packed Full with Major Central Bank Meetings
It's a packed week for central banks.
The Fed, Bank of Canada and Reserve Bank of New Zealand meet on Wednesday, the ECB on Thursday, and the BOJ a day later.
The Fed, ECB and BOJ face no immediate pressure to hike rates after tightening last month.
Fed Chair Kevin Warsh will be pressed on his view on the rate outlook. The ECB is sure to face questions about surging French borrowing costs that risk becoming a flashpoint, while the BOJ may raise its inflation forecasts in a post-meeting report.
Markets expect Canada and New Zealand to hike rates to contain inflation, with all policymakers grappling with the extent to which high oil will fuel broader price pressures.
(3) On Tuesday, an Israel in Conflict Goes to the Polls
Israel's election on Tuesday is poised to be one of the most consequential in the country's history.
Polls have it as a coin toss, with neither Prime Minister Benjamin Netanyahu's Likud bloc nor an opposition centered around former military chief Gadi Eisenkot expected to win a majority, raising the prospect of lengthy coalition negotiations.
Yet for markets, it also comes after an extraordinary rally in Israeli assets.
Since 2023's October 7 attacks, the Tel Aviv stock market has surged more than +135%, while the shekel is up a world-beating +25%.
Analysts are quick to point out the AI boom has been key, given Israel's tech expertise, and will remain so.
But investors also see the potential for tensions to be gradually dialed down in the longer term if Eisenkot and his allies can win out.
(4) A U.K. Budget Gets Announced
British finance minister John Healey will announce his first budget on Wednesday, when he will try to offer some relief from higher energy prices to households, but without unsettling the bond market by ramping up borrowing.
That means Healey may have to accept a narrowing of his room for maneuver to meet his fiscal rules. Analysts polled by Reuters think he can allow his headroom to almost halve to around £15 billion ($20 billion) without spooking the market.
Banks might bear the brunt of tax increases, and the share prices of Britain's biggest lenders have fallen in the run-up to Healey's high-profile debut.
Bigger decisions on spending in areas such as defence, public services and welfare are likely to be put off until next year, with Healey hoping the Iran war — and the pressure it is putting on government borrowing costs — may have abated by then.
(5) A Four-day Mainland China Communist Party Plenum Plays Out
China's top leadership gathers in Beijing for the four-day Fifth Plenum from Monday, with officials deliberating on "Advancing Full and Rigorous Party Self-Governance.”
That may sound inward-looking, but official Chinese commentary frames the initiative as an effort to strengthen Party discipline and execution in response to a more challenging external environment, including an increasingly tense relationship with the United States and curbs on China's access to advanced foreign technology.
That's not to say Beijing doesn't face challenges at home too, with domestic demand stuck in a prolonged slump that has proved stubbornly resistant to stimulus efforts.
Zacks #1 Rank (STRONG BUY) Stocks
This week, I picked three very large market cap Zacks #1 (STRONG BUY) stocks.
Two with a Zacks Value score of F, and one with a Zacks Value score of A.
(1) Texas Instruments (TXN - Free Report) : This is a $280 a share semiconductor stock, with a market cap of $260B.
It is found in the Zacks Semiconductor-General industry. The stock holds a Zacks Value score of F, a Zacks Growth score of C, and a Zacks Momentum score of B.
F12M P/E: 33.6.
Image Source: Zacks Investment Research
Texas Instruments is an original equipment manufacturer of analog, mixed signal and digital signal processing (DSP) integrated circuits.
TI has manufacturing and design facilities, including wafer fabrication and assembly/test operations in North America, Asia and Europe.
Management's strategy has been to build assets that would be fully utilized through their lifetimes and outsource any excess demand in peak situations to outside foundries.
Analog products have been categorized into three: high performance analog, high volume analog and logic, and power management.
The Embedded Processing segment includes TI's OMAP, connectivity solutions, non-wireless DSPs and microprocessors.
The Other segment includes smaller semiconductor product lines, such as DLP products, RISC microprocessors and ASICs, calculators and other schoolroom tools, and royalties.
The company's products are sold in industrial, personal electronics, automotive, communications, enterprise and other end-markets.
(2) Shopify (SHOP - Free Report) : This is a $169 a share Internet Services stock, with a market cap of $224.2B.
It is found in Zacks Internet-Services industry. The stock holds a Zacks Value score of F, a Zacks Growth score of B, and a Zacks Momentum score of C.
F12M P/E: 92.0.
Image Source: Zacks Investment Research
Shopify provides a multi-tenant, cloud-based, multi-channel commerce platform for small and medium-sized businesses.
Merchants use the company's software to run business across various sales channels, including web and mobile storefronts, physical retail locations, social media storefronts and marketplaces.
Shopify's platform enables merchants to manage products and inventory, process orders and payments, ship orders, build customer relationships and leverage analytics along with reporting from one integrated back office.
Moreover, Shopify hosts a huge database of merchant and customer interactions.
Merchants leverage this transactional dataset to get meaningful insight into the sales channel growth prospects and consumer behavioral aspects. This improves their ability to target prospective customers more easily, which drives sales growth.
(3) Total Energies (TTE - Free Report) : This is a $91 a share oil & gas stock, with a market cap of $216.6B.
It is found in the Zacks Oil & Gas – Integrated International industry. The stock holds a Zacks Value score of A, a Zacks Growth score of C, and a Zacks Momentum score of A.
F12M P/E: 7.2.
Image Source: Zacks Investment Research
TotalEnergies SE is among the top five publicly traded global integrated oil and gas companies based on production volumes, proved reserves and market capitalization.
The company has operations in countries across five continents.
The company's operations are divided into four main segments:
Exploration & Production; Integrated Gas, Renewables & Power, which spearheads TotalEnergies' ambitions in low-carbon businesses by expanding in downstream gas and renewable energies as well as in energy efficiency businesses.
Refining and Chemicals, which includes all of its bioenergies activities and a new Biofuels division and Marketing & Services, which deals with the supply and sale of petroleum products.
The company also has interests in coal mining and power generation.
Key Global Macro
Mid-week U.S. monetary policy decisions are the top focus this week.??????But don’t neglect the U.S. core PCE rate for SEP, and U.S. Q3 real GDP growth.
On Monday, the German IFO Business Climate for October came in at 92 this morning, ahead of the 90 expected and 89.9 in the prior reading. Current Assessment at 88.8 was below both the 89.9 anticipated and the 89.5 reported for September. Expectations came in higher: 91.6 versus 90.0 expected and 90.4 for the prior month.
On Tuesday, the Reserve Bank of Australia (RBA) Governor Bullock gives s speech.
There is also a Reserve Bank of New Zealand (RNBZ) policy rate decision. Look for a hike to 3.0% from 2.75%.
On Wednesday, the U.S. Fed is likely to hold its 4.0% policy rate. For now. A Chair Warsh press conference occurs too.
On Thursday, the U.S. core PCE inflation rate for SEP comes out. Look for a +3.1% y/y rate, up from +3.0% y/y.
The advance estimate for U.S. Q3 real GDP growth comes out. Look for a stronger +3.0% in Q3, after +2.1% in Q2.
The European Central Bank (ECB) should hold to its 2.65% main refi rate.
The Bank of Japan (BoJ) sets policy too. They are at a 1.25% policy rate now.
On Friday, Euro Area Q3 real GDP growth comes out too. I see +1.1% y/y is consensus, with +1.2% y/y the prior reading.
Conclusion
On Oct. 22nd, Zacks Research Director Sheraz Mian shared a Q3 earnings update.
Key points:
(1) Including the flood of Q3 earnings results from the morning of October 22nd, we now have quarterly results from 112 S&P500 members — or 22.4% of the index’s total membership.
Total earnings for these companies are up +30.9% from the same period last year, on +11.8% higher revenues.
(2) The Q3 earnings and revenue growth pace is tracking modestly below other recent periods, particularly when the reported Q3 growth rates are adjusted for Micron’s (MU - Free Report) blockbuster results.
The reported Q3 earnings and revenue growth rates decline to +13.1% (from +30.9%) and +8.5% (from +11.8%) when Micron is excluded from the reported results.
(3) 80.4% beat EPS estimates. 68.8% beat revenue estimates.
The Q3 EPS and revenue beats percentages are tracking below what we had seen from this same group of companies in other recent periods.
But otherwise in-line with historical averages.
(4) Given the positive revisions trend in place ahead of the start of the Q3 reporting cycle that had pushed estimates higher, companies will not only need to beat elevated consensus estimates, but also provide positive guidance and outlook for the coming periods.
We are off to a good start on those fronts at this stage, as estimates for Q4-26 and full-year 2026 are maintaining the favorable revisions momentum that was in place before this earnings season got underway.
We will see if this positive trend will remain in place as we move into the heart into the Q3 earnings season in the coming days.
That’s all from me!
Best of luck, in trading & investing.
John Blank, PhD.
Zacks Chief Equity Strategist and Economist