So far, this earnings season has proven to be one of winners and losers. Some companies have benefited from the disruptions caused by macro forces or changing consumer tastes; others have suffered. The casualties include IBM, that bluest of blue-chip technology firms, which posted its 14th consecutive quarterly earnings decline. Meanwhile, a host of younger players such as Google parent Alphabet posted record profits extracted from cloud-based computing. This coming week, crucial data points released out of the EU and the U.S. will test fixed-income investors’ convictions. Rather poignantly, the week and the month wind down with a celebration of life and death — and the old making the way for the new.
Monday, October 26: Laval, Quebec–based Valeant Pharmaceuticals International will hold a conference call in a bid to dispel panic sparked by Citron Research, a short seller that issued a report this past week alleging improper accounting by the company. Valeant executives will attempt to explain why sales executed through related specialty pharmaceutical companies are no cause for concern for the company’s bookkeeping, though some analysts have noted that the practice may draw separate interest from political leaders concerned about drug pricing and sales practices.
Tuesday, October 27: Barrick Gold Corp., the world’s largest gold miner, releases quarterly earnings. The Toronto–headquartered company’s stock cratered roughly 50 percent between May and September but appears to have bottomed out in recent weeks as gold has staged a modest rebound. Despite a debt-to-equity ratio higher than that of many competitors, HSBC analysts recently reiterated their buy rating on Barrick shares, albeit with a lower price target.
Wednesday, October 28: Oil speculators will be keeping an eye on the weekly report from the U.S. Energy Administration for clues as to how the increased efficiency of the shale oil boom will offset diminished capacity.
Thursday, October 29: Initial third-quarter U.S. GDP will be released before equity and bond markets open. The Conference Board-leading indicator index declined to an annualized rate of 3.4 percent for September, down significantly from August and the lowest reading since 2013, suggesting that growth in the U.S. may be beginning to lose steam. In a report Friday, David Rosenberg, chief economist and strategist at Gluskin Sheff in Toronto, downplayed the importance of the reading, noting that some of the dragging factors for the month have begun to reverse course.
Friday, October 30: Euro zone consumer price index levels will be watched for signs that more stimulus is likely. Sovereign bond yields plunged in the euro zone this past week following a dovish speech from European Central Bank president Mario Draghi, as investors wagered that policymakers would expand the ECB’s quantitative easing program.
Saturday, October 31: The art festival La Calaca, kicks off in the colonial-era Mexican city of San Miguel de Allende Inspired by Dia de Los Muertos, the Mexican holiday during which people remember and pray for friends and family who have died, the event blends long-standing traditions with contemporary art and music.