China’s agreement to boost agricultural purchases and the White House’s decision to hold off on increasing tariffs on the country, sealed with a handshake on Friday, might be enough to keep prospects alive for a comprehensive deal between the two sides, but it isn’t sufficient for a reassessment of the global growth outlook. Adding to those doubts this morning is news that China wants further talks as soon as this month to iron out the details of the “phase one” deal before signing it. A health check for the world economy is due tomorrow when the International Monetary Fund revises its growth forecast. (Bloomberg)
Earnings season will provide another gauge of economic strength and an insight into how dividend payments are holding up in the face of disappearing profit growth. For the big U.S. banks, the focus will be on how they’re keeping costs in line in an environment where interest rates remain lower than previously forecast. JPMorgan Chase & Co. gets the ball rolling tomorrow, quickly followed by Goldman Sachs Group Inc., Wells Fargo & Co. and Citigroup Inc. (Refinitiv)
This week will also bring updates on two important parts of the US economy, the American consumer and factory sector. Consumers have driven economic growth but concerns are emerging about whether they may start to curb spending in response to trade uncertainty and slower growth. Economists expect retail sales to have climbed 0.3 per cent month-on-month in September, with so-called control sales, an underlying measure of purchases also estimates to have climbed by the same margin. However, expectations for industrial production are grim as economist’s anticipate a 0.2 per cent decline overall and a 0.3 per cent drop in the manufacturing component. (FT)
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.