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Weekly Market Recap: Oct. 11, 2021

Weekly Market Recap: Oct. 11, 2021

Posted October 11, 2021 at 11:00 am
J.P. Morgan Asset Management

The week in review

  • Unemployment rate decreased to 4.8%
  • Durable orders: +1.8% (m/m)
  • Hourly earnings: +0.60% (m/m)

The week ahead

  • NFIB survey
  • JOLTS
  • Retail sales
  • Consumer sentiment

Thought of the week

With 4.6% of market cap reporting, our current estimate for Q3 2021 S&P 500 operating earnings per share (EPS) is $48.25 ($40.42 ex-financials). This represents EPS growth of 27.3% from a year prior, and 21.2% since 3Q19. However, on a sequential basis, estimates point to an earnings contraction of 7.3% q/q. The projected slowdown in quarterly growth can be attributed to macro headwinds such as the spread of the delta variant, supply chain disruptions, slower economic growth and rising wages. That said, the average price of oil increased 73.4% during the quarter and the U.S. dollar declined by 1.4%, both of which should help support earnings.

At the sector level, energy, materials and industrials are projected to lead the way, while financial profits look to have declined. Health care is expected to see earnings rise 37.2% y/y, and technology and communication services should also post solid gains. Although current estimates are showing an earnings decline relative to the second quarter, on average analysts tend to underestimate earnings by 5.3% at the start of the quarter. As such, earnings may surprise to the upside, supporting equity markets against a backdrop of higher volatility.

EPS contribution per sector

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Past performance does not guarantee future results.

Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be appropriate for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

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Copyright 2021 JPMorgan Chase & Co. All rights reserved.

©JPMorgan Chase & Co., October 2021.

Unless otherwise stated, all data is as of October 11, 2021 or as of most recently available.

Disclosure: J.P. Morgan Asset Management

Past performance does not guarantee future results.

Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. International investing involves a greater degree of risk and increased volatility. There is no guarantee that companies that can issue dividends will declare, continue to pay, or increase dividends. Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage.

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