Dow Jones, Nasdaq, S&P 500 weekly preview: Spotlight on retail sales, Q3 earnings

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Dow Jones, Nasdaq, S&P 500 weekly preview: Spotlight on retail sales, Q3 earnings

reached new highs on Friday, wrapping up a strong week as major banks delivered an encouraging start to third-quarter earnings.

Other important reports set to come out in the coming days include the New York Fed Empire Survey on Tuesday, initial jobless claims and industrial production data on Thursday, as well as the housing starts and building permits release on Friday. During the summer, earnings surprises became increasingly negative, leading industry analysts to downgrade their outlooks for third-quarter earnings. By the end of August, theEconomic Surprise Index hit one of its most negative levels in years. However, just as the third quarter wrapped up, the index turned positive, helping to push up both bond yields and stock prices.

"We think earnings growth will be at least twice as fast,” Yarden’s team said in a note. “So we are expecting a significant 'earnings hook,' comparable to the upside surprises during Q1 and Q2.”

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