Budget Deficit, Fed Minutes, Consumer Sentiment; Delta, Pepsi; and More to Watch This Week

(Barron’s)

The equity markets resumed their ascent last week, as all three major indexes rose more than 1%, shrugging off the government shutdown. Without official employment data from the Bureau of Labor Statistics, Wall Street took its cue from ADP, which reported a decline of 32,000 private-sector jobs in September. Traders are now pricing in a nearly 100% chance of a quarter-point rate cut at the Federal Open Market Committee’s late October meeting.

This week will be light on economic and earnings data. But it’s the calm before the storm, as third-quarter earnings season kicks off on October 14, with several of the Big Banks set to report results.

The Federal Open Market Committee will release the minutes from its mid-September meeting on Wednesday, and the University of Michigan will release the results of its Consumer Sentiment survey on Friday.

Constellation Brands will announce earnings on Monday, followed by McCormick on Tuesday. Delta Air Lines and PepsiCo will release their results on Thursday.

Monday 10/6

Constellation Brands reports quarterly results.

Tuesday 10/7

McCormick releases earnings.

The Federal Reserve Bank of New York releases its Survey of Consumer Expectations for September. Consumers’ expectations of one-year inflation was 3.2% in August.

Wednesday 10/8

The Federal Open Market Committee releases the minutes from its mid-September monetary-policy meeting. The FOMC cut the federal-funds rate by a quarter of a percentage point to 4% – 4.25% at that confab, with newly appointed Fed governor Stephen Miran dissenting in favor of a half-point rate cut. Traders are fully expecting another quarter-point rate cut at the FOMC’s late October meeting.

Thursday 10/9

Delta Air Lines, Levi Strauss , and PepsiCo announce quarterly results.

Friday 10/10

The University of Michigan releases its Consumer Sentiment survey for October. Consensus estimate is for a 54.5 reading, slightly less than September’s 55.1. Consumers’ expectations for year-ahead inflation was 4.7% in September, and 3.7% for longer-run inflation. There has been a deep disconnect for several years between a rising stock market and dour consumer sentiment.

The Treasury Department releases the U.S. Treasury Statement for September and fiscal 2025, assuming the government has reopened. Through the first 11 months of fiscal 2025, the budget deficit was $1.97 trillion compared to $1.9 trillion through the first 11 months of fiscal 2024.

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