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U.S. Midterm Elections: Global Week Ahead

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Key Takeaways

  • Apple Reports Q4 Results After Monday's Close
  • U.S. Midterms Tuesday Determine Congressional Makeup
  • BLS Jobs Numbers Come Out Friday Morning

What happens across this Global Week Ahead?

Different market themes collide in the coming week, with —

  • U.S. midterm elections
  • Key macro-economic data
  • Major tech earnings, and 
  • A run of central bank meetings


— All set to test investors.

The U.S. midterms will shape the political landscape for the next two years, while October nonfarm payrolls data will offer fresh clues on the health of the world's biggest economy.

Earnings from major tech and AI companies also come in as enthusiasm for the AI trade shows signs of fading.

Elsewhere, several major ‌central banks are due to meet, while investors continue to assess developments in key emerging markets, including Brazil and Indonesia.

Next are Reuters’ five world market themes, re-ordered for equity traders—
 

(1) Tech Giant Apple Headlines This Week’s Earnings Calendar


Apple (AAPL - Free Report) , one of the "Magnificent 7" big tech giants, headlines the earnings calendar this afternoon, along with some stars in the AI galaxy later in the week.

The AI trade is in particular focus after disappointing results from Google parent Alphabet, Amazon and Intel triggered sharp share-price ‌declines.

Upcoming reports from Qualcomm (QCOM - Free Report) , and rival Advanced Micro Devices (AMD - Free Report) , could either reinforce or challenge concerns that investor enthusiasm for AI is losing momentum.

Over in Europe, investors will also hear from companies exposed to Trump's tariffs and higher energy prices stemming from the Iran war, including automakers BMW BAMXF, Mercedes Benz MBGYY, Ferrari RACE and airlines Deutsche Lufthansa (DLAKY - Free Report) , Ryanair (RYAAY - Free Report) and British Airways owner ICAG (ICAGY - Free Report) .
 

(2) On Tuesday, the U.S. Midterm Elections Happen


Tuesday's U.S. midterm elections will determine whether Democrats can wrest control of Congress from President Donald Trump's Republican party, potentially reshaping the policy outlook for markets.

Democrats are widely expected to win the House of Representatives, while control of the Senate remains less certain. Republicans have controlled both chambers during Trump's first two years in office.

Should Democrats prevail, the prospect of tougher regulation on AI, including pushback on data center expansion, is on investors' radar, along with potentially greater scrutiny of Wall Street banks and crypto firms.

The outcome could also influence expectations for fiscal spending, while defense and healthcare stocks may be particularly sensitive to the result.
 

(3) Friday Morning, U.S. Federal Nonfarm Payroll Data for October Lands


Friday's October non-farm payrolls report caps a busy week for the U.S. economy and could provide fresh guidance on the Federal Reserve's next move.

September data showed the economy added a lower-than-expected +29,000 jobs.

The labor market has remained resilient. Unemployment stood at 4.2% last month, while weekly jobless claims are hovering near 57-year lows.

The Fed on Wednesday left rates unchanged and upgraded its assessment of the economy to "strong" from “solid.”

Markets are pricing about an 80% chance of a Fed rate hike in December, reflecting some uncertainty over the timing of the next move. The payrolls number could bring some clarity.
 

(4) Trailing the FOMC Last Week, More Central Bank Meetings Happen


Another week brings another packed schedule of central bank meetings.

The Reserve Bank of Australia announces its policy decision on Tuesday, followed by Sweden's Riksbank on Wednesday and the Bank of England and Norges Bank on Thursday.

The Fed, European Central Bank and Bank of Japan all left policy unchanged this week, but markets expect the RBA, Riksbank and BoE to raise rates.

It would be the fifth increase this year for Australia's central bank as it battles stubborn inflation, but the first for Sweden and Britain.

Both have so far adopted a wait-and-see approach, but growing inflation risks are increasing the case for action.

Norway's central bank is further along the tightening path, having already raised rates twice this year.
 

(5) Brazil and Indonesia Central Banks Set Policy, Amidst Major Complications


Brazil's central bank faces a more complicated backdrop after a dramatic election campaign overturned market expectations.

Flavio Bolsonaro's first-round victory initially buoyed markets, but Luiz Inacio Lula da Silva's comeback win in the runoff reversed those gains, sending the Brazilian real and equities sharply lower.

The political uncertainty has complicated an easing cycle that has brought interest rates down to 13.75%, making Wednesday's policy decision and accompanying guidance a key focus for investors. Markets will also be watching for Lula's choice of finance minister for signals on future fiscal policy.

In Indonesia, third-quarter GDP data due on Thursday will offer a fresh gauge of economic momentum.

With the rupiah near record lows, investors are looking for signs of strain in Southeast Asia's largest economy amid concerns over President Prabowo Subianto's policies and his ambitious 8% growth target.
 

Zacks #1 Rank (STRONG BUY) Stocks


Here are three Zacks #1 (STRONG BUY) large-cap stocks. Each has shown ‘bubble’ stock pricing.

(1) Corning (GLW - Free Report) : This is a $127 a share communications component stock, with a market cap of $113B.

It is found in the Zacks Communications-Component industry. The stock holds a Zacks Value score of D, a Zacks Growth score of B, and a Zacks Momentum score of A.

F12M P/E: 39.1:
 

Zacks Investment Research
Image Source: Zacks Investment Research

Corning Inc.’s markets include optical communications, mobile consumer electronics, display, automotive, and life sciences.

They also produces advanced glass substrates that are used in a large number of applications across multiple markets.

(2) Canadian National Resources Ltd. (CNQ - Free Report) : This is a $55 a share Canadian Oil Sands E&P stock, with a market cap of $112.6B.

It is found in Zacks Oil & Gas – Exploration & Production industry. The stock holds a Zacks Value score of C, a Zacks Growth score of B, and a Zacks Momentum score of C. 

F12M P/E: 13.4:
 

Bigstock
Image Source: Bigstock

Established in 1973, Canadian Natural Resources is one of the largest independent energy companies in Canada engaged in the exploration, development and production of oil and natural gas.

The company boasts of a diversified portfolio of crude oil (heavy as well as light), natural gas, bitumen and synthetic crude oil (SCO).

Canadian Natural Resources' core operations are focused in Western Canada, the United Kingdom sector of the North Sea and offshore Africa, which includes Cote d'Ivoire, Gabon, and South Africa.

The company reports its activities into two segments: Exploration & Production, and Oil Sands Mining and Upgrading.

Of particular significance is Canadian Natural's substantial world class oil sands mining assets - Horizon Oil Sands and the Athabasca Oil Sands Project (AOSP).

Through these properties, the company holds leases that contain an estimated six billion barrels of proved and probable SCO reserves.

(3) ASE Technology (ASX - Free Report) : This is a $45 a share Taiwanese Semiconductor stock, with a market cap of $98.1B.

It is found in the Zacks Electronics-Semiconductor industry. The stock holds a Zacks Value score of D, a Zacks Growth score of B, and a Zacks Momentum score of C.

F12M P/E: 34.7:
 

Bigstock
Image Source: Bigstock

ASE Technology Holding Co Ltd. is a provider of semiconductor manufacturing services in assembly and testing.

The company develops and offers complete turnkey solutions covering front-end engineering testing, wafer probing and final testing as well as IC packaging, materials and electronic manufacturing services. It operates primarily in Taiwan, China, South Korea, Japan, Singapore, Malaysia, Mexico, United States and Europe.

ASE Technology Holding Co Ltd., formerly known as ASE Industrial Holding Co., is based in Kaohsiung, Taiwan.
 

Key Global Macro


U.S. midterm elections keep Tuesday the primary focus. But don’t overlook Friday’s U.S. nonfarm payrolls for October.

On Sunday, Mainland China’s RatingDog manufacturing PMI for October came in down slightly to 52.0, from 52.1 in the prior print.

On Monday, the influential U.S. ISM Manufacturing PMI for October reached 55.5%, ahead of expectations and better than the prior September reading of 54.5%.

The Reserve Bank of Australia (RBA) sets it monetary policy rate (Tuesday Australia time, but later Monday in the U.S.), now at 4.6%.

On Tuesday, U.S. JOLTS job openings for September come out. 7.079M was the prior reading.

On Wednesday, Euro Area core and broad HICP inflation rates for October come out.

In y/y terms, +2.5% was the prior core HICP rate. Broad HICP was much higher at +3.8%.

U.S. ADP private payroll adds should be +90K for October.

On Thursday, the Bank of England (BoE) makes a policy rate decision. It is at 3.75%.

On Friday, U.S. nonfarm payrolls for October come out. +29K in September was the prior reading.

A preliminary University of Michigan consumer sentiment survey for November comes out too. 48 was the prior reading.
 

Conclusion


On Oct. 28th, Zacks Research Director Sheraz Mian shared a Q3 earnings update.

Five key points:

(1) The Q3-26 earnings season reconfirms the broad-based strength we've seen in the last few reporting cycles.

The earnings and revenue growth pace remains strong, but companies are finding it difficult to beat consensus revenue estimates.

On the positive side, the revisions trend remains positive, with estimates for 2026 Q4 and full-year 2027 continuing to rise.

(2) Total Q3-26 earnings for the 200 S&P500 members that have reported results already are up +32.6% from the same period last year on +12.0% higher revenues.

80.5% beat EPS estimates and 69.0% beat revenue estimates.

The proportion of these 200 index members beating both EPS and revenue estimates (the ‘blended’ beats percentage is 61.5%).

(3) For the Finance sector, we now have Q3 results from 68.5% of the sector’s market cap in the S&P500 index.

Total earnings for these companies are up +8.5% from the same period last year on +8.1% higher revenues, with 79.6% beating EPS estimates and 50.0% beating revenue estimates.

Growth rates and beat percentages for Finance sector companies are tracking below other recent periods, with the revenue-beat percentage notably on the weak side.

(4) Micron (MU - Free Report) and Nvidia (NVDA - Free Report) continue to be material contributors to the Tech sector’s growth picture.

Excluding Nvidia, Micron and Alphabet (GOOGL - Free Report) , which enjoyed an outsized gain in the preceding period?

Q3 earnings for the rest of the Tech sector would be up +23.8% (vs. +45.7% otherwise).

(5) For Q4-26, Zacks expectation is for earnings growth of +28.4% on +12.6% higher revenues.

Zacks expects 15 of the 16 Zacks sectors to enjoy positive earnings growth. 9 sectors are expected to produce double-digit earnings growth.

Q4 estimates are steadily rising, with the current +28.4% earnings growth rate up from +26.6% at the start of October and +23.4% at the start of July.

That’s all!

Best of luck, trading & investing.

John Blank, PhD.
Zacks Chief Equity Strategist and Economist

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