NEW YORK - A resilient economy and strong consumer demand are expected to fuel a slight rise in third-quarter U.S. earnings, which could throw a lifeline to a stock rally that has stumbled in recent months.
After a rough September for stocks, "we need some good news" from earnings season, said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management. Friday's monthly U.S. jobs report for September was the latest evidence of economic strength. Employment rose by the most in eight months, suggesting consumer demand could stay intact for now.
Investors will watch for signs that higher rates have raised costs for companies, slowing their ability to borrow and grow. "If the banks set the tone pretty well … that could be good for the market," said James Ragan, director of wealth management research at D.A. Davidson.Artificial intelligence is likely to be a key theme again. Investors will look to see if companies can turn optimism over AI developments into an improved outlook. "We know companies are investing a lot," Ragan said.