The Stock Market kicks off Q4 with investors focusing on speeches from Fed Chair Powell and ECB President Lagarde.

Stocks start Q4

After a disappointing third quarter for stocks, the crucial fourth quarter of the year is already underway.

The S&P 500 dropped around 3.6% during the quarter, the Dow dropped 2.6%, and the Nasdaq dropped 4.1%. The S&P 500 sank 4.9%, the Dow dropped 3.5%, and the Nasdaq dropped 5.8% in September.

Stock markets are trembling due to rising bond rates, and some investors are concerned that megacap firms like Apple, Microsoft, Alphabet, and Amazon may be another weak point due to their soaring valuations.

Since future predicted earnings are more heavily discounted when yields rise, shares of tech and growth businesses, which frequently have strong expected profit growth in the years to come, are typically struck hard.

While the AI surge is still important, Q4 will bring another earnings season, and there are still some uncertainties regarding the ultimate boost to profitability.

US Data

On Friday, the United States will disclose its widely anticipated employment report for September. According to experts, the economy added 163,000 jobs in September, a modest down from the 187,000 jobs gained in August.

An unexpectedly strong number might confirm the Fed's policy of keeping interest rates higher longer, which would be negative for the markets.

Prior to Friday's report, the August JOLTS employment report is scheduled to be released on Tuesday. The ADP National Employment report, which is expected to show declining job growth, will next provide an update on hiring in the private sector.

ECB President Speech

After statistics on Friday showed that Eurozone inflation fell to its lowest level in two years last month, investors will be watching Christine Lagarde's speech on Wednesday for clues on the future trajectory of interest rates.

The information encouraged hopes that the ECB has increased interest rates sufficiently to bring inflation back down to its objective of 2%.

In the autumn of last year, the bloc's inflation momentarily reached double digits as a result of excessive government expenditure, rising energy prices, and supply chain problems following the pandemic.

After a decade of attempting to boost inflation with an ultra-easy monetary policy, the ECB responded by raising interest rates to a record-high of 4.0% from a low of minus 0.5% in just over a year.

RBNZ & BBA

The Reserve Bank of Australia will have its first meeting on Tuesday with Michele Bullock, the institution's first female governor, in charge.

Following some recent hints of ongoing pricing pressures in the service sector, investors will be watching for any clues as to whether the RBA is through raising rates or if more could be on the way. The majority supports pausing.

On Wednesday, the Reserve Bank of New Zealand will convene its most recent policy meeting. Market observers are not anticipating a rate rise despite the RBNZ's hawkish posture; instead, they are concentrating on whether authorities may hint at a potential move in November.

(Sources: investing.com, reuters.com)