U.S. stocks surged for a second consecutive session Friday as retail sales were surprisingly strong and companies’ quarterly results continued to impress investors. Major indexes notched their best week in months. The Dow Jones Industrial Average climbed 1.6% on the week, while the S&P 500 added 1.8%. The Nasdaq Composite was up 2.2%. 

Top Sectors last Week:

  • Materials Sector (ETF: XLB) up 3.66%
  • Real estate Sector (ETF: XLRE)  up 3.54%
  •  Consumer Discretionary Sector (ETF: XLY) up 3.49%

Interesting News:

  • It was a solid first week of Q3 earnings as the largest U.S. banks posted another robust round of quarterly results. A rebounding economy allowed lenders to release more cash they had set aside for pandemic losses, while equity financing and trading boosted bottom lines. 
  • Headlining the earnings winners Friday was Goldman Sachs Group (GS), whose profit rose 66% from the year-earlier period to $14.93 a share, well above the consensus Wall Street estimate of $10.14.
  • JPMorgan (JPM) – Q3 net interest income of $13.2B, driven by balance sheet growth and higher rates, while Asset & Wealth management net revenue came in at $4.3B (+5% Q/Q and +21% Y/Y).
  • Bank of America (BAC) – Regained the organic customer growth momentum it experienced before the pandemic, as well as reporting a record quarter for M&A transactions.
  • Wells Fargo (WFC) – Consumer Banking & Lending net income of $2.5B climbed 15% from Q2 and 181% from Q3 2020, while total outstanding loans were down from a year ago, but up from Q2.
  • Citibank (C) – Spending on Citi credit cards rose 20% Y/Y to a record and continued climbing from the summer, though “strong consumer balance sheets impacted lending.”
  • Morgan Stanley (MS) – Topped expectations as investment bankers scored their best quarter ever, with the division posting a 67% increase in revenue to $2.85B.
  • Because of the supply chain and logistical problems Companies like Amazon (AMZN), Target (TGT), Pottery Barn (WSM), Ulta Beauty (ULTA) and Gap (GPS) are even offering discounts – or starting holiday advertising – six weeks before Black Friday. The goal here is to stretch out the year-end shopping season, as supply chain challenges could leave them with empty shelves closer to the holidays. The firms also have a load of goods that they brought in early, but with limited warehouse space available, they need consumers to buy the stuff to top off their cash balances.
  • Some ecommerce ETF’s for the holiday season: Amplify Online Retail ETF (IBUY),  Global X E-commerce ETF (EBIZ), ProShares Online Retail ETF (ONLN).
  • Bitcoin ETF incoming: The SEC could decide as early as Monday to allow American ETFs to hold Bitcoin (BTC-USD) futures, making it easier for small investors to gain exposure to the cryptocurrency. The agency is expected to approve an amended filing submitted by ProShares on Friday to launch the ProShares Bitcoin Futures ETF. Several other ETF firms have also filed to launch similar funds and will be watching closely to see whether regulators green light ProShares’ plan. All the hype is adding to bullish crypto sentiment as Bitcoin traded above $60,000. At that level, the token has doubled in value this year and is near April’s record high of $64,895. While the proposed Bitcoin-futures ETFs won’t invest directly in crypto, issuers aim to trade futures contracts based on Bitcoin.


Calendar:

The earnings season takes off next week with big reports pouring in from every sector. S&P 500 companies are expected to post profit growth of 32% this quarter. In the early going of the earnings season, companies are topping estimates by an average of 16% vs. the long-term average of 4%. On the economic calendar, reports on building permits, housing starts, the Philadelphia Fed manufacturing index, existing home sales, and leading economic indicators will draw attention – while the Federal Reserve’s beige book report will give economists another check on the central bank’s thinking. Seventy-two S&P 500 companies report financial results this coming week. Several big U.S. banks got things off to a strong start this past week, and the coming round of earnings will include results from notable companies in telecom, consumer staples, energy, technology, healthcare, and the airline industry.

Earnings:

Monday, October 18: Albertsons (ACI) and State Street (STT).

Tuesday, October 19: Johnson & Johnson (JNJ), Procter & Gamble (PG), Philip Morris International (PM), Travelers (TRV), United Airlines (UAL), Netflix (NFLX) and Canadian National Railway (CNI).

Wednesday, October 20: Anthem (ANTM), Verizon (VZ), Abbott Labs (ABT), Biogen (BIIB), IBM (IBM), Tesla (TSLA), Lam Research (LRCX), Kinder Morgan (KMI) and Las Vegas Sands (LVS).

Thursday, October 21: Philip Morris International In (PM), AT&T (T), Dow (DOW), American Airlines (AAL), AutoNation (AN), Intel (INTC), Whirlpool (WHR), Chipotle (CMG), Mattel (MAT), IBM (IBM), Snap (SNAP) and Boston Beer (SAM).

Friday, October 22: American Express (AXP) and Honeywell (HON).


IPO’s This week:

Another busy week is setting up in the IPO market with as many as eight new offerings on tap. Biofrontera (BFRI), Marpai (MRAI), Enfusion (ENFN), P10 (PX), Portillo’s (PTLO), Vita Coco (COCO), Winc (WBEV) and Aris Water Solutions (ARIS) (BFRI) are all expected to price their IPOs and begin trading.