Flat opening in Europe (Eurostoxx futures -0.3%, under pressure after the strong protests over the weekend in France, with 550,000 demonstrators, 2,400 arrests and increasing pressure on Macron ahead of 2027, attention to the France-Germany spread) but up in American futures (S&P +0.8% and Nasdaq +1.3%) after last week's declines, especially intense in the case of technology (Nasdaq -5.5%) amid doubts about the AI theme (more due to financing cost than demand, considering the upward revisions of guidance from companies like TSMC, ASML or Schneider).
The Brent -2% to 108 usd/b after rising +4% on Friday and nearly touching 110 usd/b, with Hormuz and the Houthis maintaining the geopolitical premium high, scarcity mainly remaining in refined products and with European and Asian gas as the most inflationary risks heading into winter.
In China, we have received relevant references tonight, slightly better than expected, GDP 3Q26 +1.2% q/q (vs +1%e and +0.9% in 2Q) and +4.5% y/y (vs +4.4%e and +4.3% prior), although at the lower end of the official range of +4.5%/+5% for the second consecutive quarter. The September data continues to show a weak economy particularly weighed down by the real estate sector: retail sales +1.1% y/y (vs +0.5%e and +0.4% prior), industrial production +5.5% y/y (in line with expectations and vs +5.2% prior), fixed asset investment -7.2% (vs -7.3%e and -7.2% previous), property investments -20.6% y/y (vs -20%e and -19.9% previous) and new and used housing prices continuing their monthly declines, although with some moderation.
Indonesia extends its decline with another -5%, totaling -17% in two sessions amid the possibility of being excluded from the MSCI indices.
Looking ahead to the week as a whole, we highlight the publication of the preliminary PMIs for October in Europe, the United States and Japan (Friday), which will provide the most updated view on the economic cycle, expected to maintain its strength, especially in the United States, with only a slight moderation compared to the good figures from September.
In Europe, we will be watching the ZEW survey of financial analysts and institutional investors for October in Germany and the Eurozone, with some moderation expected, as well as the preliminary consumer confidence for October in the Eurozone. In terms of inflation: September CPI (headline, core, services) in the United Kingdom which should rebound compared to August and support a BoE rate hike in November, and PPI in Germany. Along the same lines, we highlight the September expectations for the ECB CPI (with a possible uptick in inflationary pressures, 3.2%e vs 3% prior for 1 year and stability at 2.9% for 3 years).
Finally, in the United States, we will learn about the University of Michigan consumer survey final for October and the leading indicators for September, while in Japan we highlight the September CPI.
The 3Q26 earnings season will gain intensity next week in Europe and will begin in Spain. From the United States, we highlight Netflix, Tesla, Meta Platforms, AT&T, P&G, 3M, General Motors and American Express. In Europe, we will be monitoring Vivendi, Carrefour, Essilor Luxottica, L'Oréal, Nestlé, Vinci, Hermès, Unicredit and Barclays, among others, and in Spain, we start with Enagás (Tuesday), Iberdrola and Puig (Wednesday) and Bankinter and Viscofan (Thursday) and Navigator (Portugal) on the same day.
The outlook for 3Q26 reflects optimism with estimates that have been revised upwards, allowing for some moderation in the multiples paid in the stock market. Thus, the analysts' consensus estimates that S&P 500 companies will see an EPS growth of +29.5% and +12.3% in revenues. If these estimates are met, it would be the third consecutive quarter of EPS growth above 25% and the eighth consecutive quarter of double-digit growth for the S&P 500, while revenues would mark the third consecutive quarter of double-digit growth. The flip side of these estimates is that half of the growth would come from AI, with very high demand from the market, especially in the technology sector.
From the results known so far for the S&P 500 (9% of the total), the bias has been mixed compared to expectations. Although the percentage of S&P 500 companies that exceed EPS estimates is above recent averages, the magnitude of these surprises is below average: 84% have exceeded EPS (vs 78% average over 5 years and 77% average over 10 years) by +2.6% vs estimates (+7.5% average over 5 years and +8% average over 10 years), and 67% in revenues (vs 70% average over 5 years and 68% average over 10 years) by +1.1% (vs +1.8% average over 5 years and +1.6% average over 10 years).
At the market level, we will continue to monitor the evolution of the conflict in the Middle East and its impact on energy and inflation, without losing sight of the political landscape, with the complicated situation in France, the midterm elections on 3 November in the United States and the Spanish elections on 29 November. This political and geopolitical context complicates the work of Central Banks, as they are forced to balance the risk of an economic slowdown induced by the energy shock, while trying to control still persistent inflationary pressures.