Key stock market events of the week: Fed, ECB and U.S. GDP

The week is decided by central banks and the price of money: stock market key dates for the week

The stock market key dates for the week are fairly clear: on Wednesday, October 28 at 19:00 (12:00 in Mexico City), the Fed speaks; on Thursday, October 29 at 14:15 (7:15 in Mexico City), it is the ECB’s turn; and in between, on Thursday, October 29 at 13:30 (6:30 in Mexico City), U.S. GDP is released. For me, this is not a week to look for drama, but to gauge whether the market truly accepts high rates for longer or whether it starts fantasizing again about rapid cuts. In the background, on Friday, October 23, the S&P 500 closed at 7,623.68 points and the IBEX 35 at 18,989.80, while Brent starts this Monday at 109.97 dollars.

Week’s calendar (Madrid time)

Central banks and macro: the market tests its faith in pauses

The main focus is on the Federal Reserve. The market heads into Wednesday, October 28, with rates expected at 4.00% and an uncomfortable reference point: in September, the Fed raised rates by a quarter point to the 3.75%-4.00% range. If it now holds steady, what will matter will not be the move itself, but the tone. With the S&P 500 having closed on Friday, October 23, at 7,623.68 points and the U.S. 10-year Treasury yield at 4.988%, the bar for a complacent reading is high.

A day later comes the ECB, with expectations that it will keep the main refinancing rate at 2.65%. There, I pay less attention to the decision, which seems priced in, and more to any nuance on inflation, credit and monetary transmission. On Friday, October 30, the macro block wraps up with Germany’s preliminary GDP at 10:00 (3:00 in Mexico City), the eurozone’s at 11:00 (4:00 in Mexico City), and Spain’s preliminary CPI at 09:00 (2:00 in Mexico City). If European growth keeps cooling but inflation does not clearly ease, the ECB will have little room to sound dovish. Cheap money always seems like a good idea until it stops being one.

Corporate earnings: Alphabet, Microsoft, Amazon and Santander set the pace

The micro side is also in play. On Tuesday, October 27, Visa reports after the Wall Street close and Coca-Cola before the open. On Wednesday, October 28, two names that really matter for indices and the narrative arrive: Alphabet and Microsoft, both after the Wall Street close, as well as Santander before the open and BBVA after the close. Thursday, October 29, will be Amazon and Intel after the close, with Eli Lilly, Mastercard, Caterpillar, Shell and TotalEnergies before the open. And on Friday, October 30, ExxonMobil, Chevron, BP and AbbVie report before the open.

The mechanism here is simple: if Big Tech once again supports sales and margins, the market will be able to tolerate demanding rates more easily. If it disappoints on revenue, capex or guidance, the week can turn quickly because valuation is not giving anything away. In Europe, Santander and BBVA matter for a less glamorous, but more useful reason: they say a lot about margins, funding costs and the pulse of credit.

Geopolitics and commodities

Brent (January contract) starts this Monday, October 26, at 109.97 dollars, 1.55% below Friday’s close of 111.70. That slight pullback cools part of the immediate inflation fear, but it does not eliminate the risk. If crude stabilizes lower, central banks will breathe a little easier; if it rebounds sharply, the market will be reminded once again that energy still matters more than equities would like. Gold, at 4,020.50 dollars, also remains a hedge that does not usually appear by chance.

My view

I think the change from last week is less about the indices than about the sequence of risk. On Friday, October 23, the S&P 500 slipped 0.52% and the Nasdaq 0.21%, while the VIX finished at 19.45. It is not panic, but neither is it complacency. To me, the market is entering a serious test: it wants to hear a pause from the Fed and the ECB, but it also needs that pause not to come with an uncomfortable message about persistent inflation. And there I tend to be skeptical. When the cost of money stops falling, the stock market has to justify each multiple better.

What would make me change my mind? A very specific combination: that on Thursday, October 29 at 13:30 (6:30 in Mexico City), U.S. GDP does not disappoint, that core PCE stays contained, and that the Fed at 19:00 (12:00 in Mexico City) and the ECB at 14:15 (7:15 in Mexico City) maintain a watchful bias without closing the door to tightening further if needed. I see the main risk in the opposite scenario: growth that holds up, inflation that does not ease, and markets that are still pricing things as if the central bank’s next natural move were a cut. That shortcut is rarely cheap.

Week’s key dates

• The Fed decides on Wednesday, October 28 at 19:00 (12:00 in Mexico City), with rates expected at 4.00%.
• The ECB decides on Thursday, October 29 at 14:15 (7:15 in Mexico City), with expectations to keep the main rate at 2.65%.
• U.S. advance GDP on Thursday, October 29 at 13:30 (6:30 in Mexico City) could change the tone of the entire week.
• U.S. core PCE, also on Thursday at 13:30 (6:30 in Mexico City), matters more than many speeches.
• Alphabet and Microsoft report on Wednesday after the Wall Street close; Amazon on Thursday after the close.
• Santander reports on Wednesday before the Wall Street open and BBVA on Wednesday after the close.
• On Friday, October 30, preliminary GDP for Germany and the eurozone arrives, along with Spain’s advance CPI.
• Brent starts the week at 109.97 dollars: if energy tightens again, the inflation truce would not last long.

For anyone following these stock market key dates, order matters. First, central banks. Then growth and inflation. And only after that, earnings. Sometimes the market does exactly the opposite; then the surprises arrive and it pretends no one saw them coming.

To go deeper

• My previous analysis: Stock market key dates for the week: macro, oil and earnings
• Stock market investing guide — basic concepts to make better decisions

This article is general financial information and does not constitute investment advice. Investing involves the risk of losing invested capital.