Latest week events: the sell-off continues

Latest week’s events: the sell-off continues 

In the coming week, investors have to analyse a huge amount of economic reports like the latest data on PCE inflation (the Fed's preferred inflation gauge), durable goods orders, consumer confidence and new housing sales. The third estimate of US GDP for the 2nd quarter should also be published.

Meanwhile, Wall Street is also gearing up for what is expected to be a challenging reporting season filled with economic warnings and downward revisions to companies' forecasts.

"We believe revenue estimates for 2023 should continue to decline," the memo said, outlining a discussion between Ross Mayfield of Baird and Ryan Grabinsky. "Currently, our chances of a recession in 2023 are about 50%, and during a recession, profits decrease on average by about 30%."

"The consensus earnings estimate for 2023 is down just 3.3% from June highs, and we think these estimates will be revised downward, especially if the chances of a 2023 recession increase."

Of the S&P 500 companies that published profit and loss reports from June 15 to September 8, 240 mentioned the term "recession". 

Several key earnings reports will be announced in the coming week, including Bed Bath & Beyond, Nike, Micron Technology and Rite Aid.