We start an extremely busy week for markets after a few major landmarks were reached on Friday which DB's Jim Reid felt are worth highlighting. The S&P 500 moved into "correction" territory, now down -10.27% from the July highs. Meanwhile, the benchmark small-cap Russell 2000 index went through its June 2022 lows and back to levels last seen in November 2020, around the time that Pfizer announced the first successful Covid-19 vaccine trials. In fact, it's now back to levels it first breached in November 2018. When you factor in the huge inflation over this period, that's some serious real adjusted declines. So for all the optimism surrounding US equities this year it really is only a handful of huge companies that's skewing the positivity.

And speaking of companies skewing performance, if one strips away the Mag 7 stocks, the non-tech heavy SPW, NYA, CWI, RTY equity indices are now all at or below 200wma and down for the year.

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The move into correction territory comes as we hit a very busy week of important central bank meetings, data, earnings and a fresh Treasury refunding announcement.

• The BoJ could be the stand-out (tomorrow) as DB's Japan economist believes (close call) they will revise YCC. That could overshadow the FOMC (Wednesday) and the BoE (Thursday) meeting, where no surprises are expected.
• In terms of data all roads point towards Payolls on Friday, with ADP and JOLTs (Wednesday) providing the warm-up act.
• Elsewhere US ISM Manufacturing (Wednesday) and Services (Friday) will be a focal point as will the various global PMI numbers, especially China's.

Over in Europe, the highlights will include the preliminary October CPIs and Q3 GDP reports for Germany today, followed by France, Italy, and the Eurozone on Tuesday.

Earnings will be in full flow but with Apple on Thursday the highlight. The full day-by-day calendar is at the end as usual but let's preview the highlights in more detail now below.

• Starting with the BoJ tomorrow, Deutsche Bank expects (full preview here) the central bank to revise its monetary policy framework but acknowledges it is a close call. They are likely to revise up their inflation forecast for the second successive Outlook Report which makes it hard for them to do nothing. DB would favour the abandonment of YCC but acknowledges that local media have suggested a bias towards tweaks. Even if the BoJ maintains the status quo, the YCC is likely to come under further pressure as expectations of policy normalisation build up .
• For the Fed on Wednesday, DB economists expect the central bank to stay on hold and see future hikes as a function of financial conditions and the path of the economy. While their baseline is for rates to stay at 5.3% through year end, they see an increasing risk of a hike in December or Q1. They also recently published a note on what the recent tightening in financial conditions mean for the Fed (see here).
• Linked into financial conditions, the latest US financing estimates (today) and refunding announcement (Wednesday) will be important given how much the early August equivalent spooked the market given the extra supply that it heralded. There is some hope that the Treasury may pause its coupon increases it flagged back in August. However our strategists think this is unlikely. (see their report here).
• The BoE will round out the busy week for central banks on Thursday; DB expects no change in the Bank Rate (5.25%) or the Bank's forward guidance. The full preview of the meeting here also touches on central bank's forecasts as well as QT. Elsewhere in Europe, Norges Bank will also decide on its monetary policy that day as well.

In terms of payrolls, economists expect the headline to come in at 190k, down from +336k in September with the UAW strike causing around a 35k drag. They also see the unemployment rate remaining at 3.8%. There will be plenty of labor market data beforehand with the ECI (tomorrow), JOLTS and ADP (Wednesday), claims (Thursday), and all the employment subcomponents within the PMI surveys.

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German GDP today will likely see a -0.3% contraction (consensus -0.2%) with a mild contraction of -0.1% (consensus 0.0%) in the wider Euro area (tomorrow ). Our economists also expect the headline inflation measure for the Euro area to further decline to 3.1% from 4.3% in September, and see the core gauge slowing to 4.1% (4.5%).

Elsewhere, reports indicate Chinese officials may gather as early as today for the National Financial Work Conference that takes place once every five years behind closed doors. The real estate turmoil as well as other financial risks will be key discussion points.

Finally, on the earnings side, we are past peak earnings...

... but it is still an extremely busy week for reporting companies with the likes of Apple, Qualcomm, PayPal, AMD, Roku, First Solar, Pfizer, Caterpiller and others on deck.

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Courtesy of DB, here is a day-by-day calendar of events

Monday, October 30

• Data: US October Dallas Fed manufacturing activity, UK September net consumer credit, mortgage approvals, M4, Japan September retail sales, job-to-applicant ratio, jobless rate, industrial production, Germany Q3 GDP, October CPI, Eurozone October services, industrial and economic confidence
• Central banks: ECB's Simkus speaks
• Earnings: McDonald's, Arista Networks, Pinterest

Tuesday, October 31

• Data: US Q3 employment cost index, October MNI Chicago PMI, Dallas Fed services activity, Conference Board consumer confidence, August FHFA house price index, China October PMIs, UK October Lloyds business barometer, Japan October consumer confidence index, September housing starts, Italy October CPI, Q3 GDP, September PPI, France October CPI, Q3 GDP, September PPI, consumer spending, Eurozone October CPI, Q3 GDP, Canada August GDP
• Central banks: BoJ decision, ECB's Visco and Nagel speak
• Earnings: Samsung, Pfizer, AMD, Amgen, Caterpillar, Eaton, BASF, BP, AB InBev, MSCI, Ares Management, Global Payments, Xylem, First Solar

Wednesday, November 1

• Data: US October ISM index, ADP report, total vehicle sales, September JOLTS report, construction spending, China October Caixin manufacturing PMI, Japan October monetary base, Italy October budget balance, new car registrations, Canada October manufacturing PMI
• Central banks: Fed's decision
• Earnings: Qualcomm, CVS, Mondelez, Airbnb, Humana, McKesson, PayPal, Estee Lauder, Apollo, Kraft Heinz, Electronic Arts, Aston Martin, Orsted, IQVIA, DuPont de Nemours, DoorDash, Marathon Oil, Albemarle, Roku, Etsy

Thursday, November 2

• Data: US Q3 unit labor costs, nonfarm productivity, September factory orders, initial jobless claims, Italy October manufacturing PMI, Germany October unemployment claims rate, France September budget balance
• Central banks: BoE decision, DMP survey, Norges Bank decision
• Earnings: Apple, Eli Lilly, ConocoPhillips, Novo Nordisk, S&P Global, Shell, Ferrari, Starbucks, Stryker, Booking, Cigna, Regeneron, Marriott, Fortinet, Cheniere, Palantir, Moderna, Block, Blue Owl Capital, Expedia, DraftKings, Paramount Global, DISH, Peloton

Friday, November 3

• Data: US October jobs report, ISM services index, China October Caixin services PMI, Q3 current account balance, UK October official reserves changes, Italy September unemployment rate, Germany September trade balance, France September industrial production, Q3 private sector payrolls, Eurozone September unemployment rate, Canada October jobs report
• Central banks: BoE's Hauser, Pill and Haskel speak
• Earnings: EOG Resources, AP Moller-Maersk, BMW, Dominion Energy, Vonovia

* * *

Finally, turning to just the US, Goldman writes that the key economic data releases this week are the employment cost index on Tuesday, JOLTS job openings and ISM manufacturing on Wednesday, and the nonfarm payrolls on Friday. The November FOMC meeting is on Wednesday. The post-meeting statement will be released at 2:00 PM ET, followed by Chair Powell’s press conference at 2:30 PM.

Monday, October 30

• 10:30 AM Dallas Fed manufacturing index, October (consensus -16.0, last -18.1)

Tuesday, October 31

• 08:30 AM Employment cost index, Q3 (GS +0.95%, consensus +1.0%, last +1.0%): We estimate the employment cost index to rise by 0.95%, reflecting the significant slowing in Q3 wage data offset by a boost from the benefits component.
• 09:00 AM FHFA house price index, August (consensus 0.5%, last 0.8%)
• 09:00 AM S&P Case-Shiller 20-city home price index, August (GS 0.8%, consensus 0.8%, last 0.9%)
• 09:45am Chicago PMI, October (GS 46.1, consensus 45.1, last 44.1): We estimate that the Chicago PMI rebounded by 2pt to 46.1 in October, reflecting upward convergence toward other surveys but a drag from the auto strikes. Our GS manufacturing tracker was unchanged on net at 49.4.
• 10:00 AM Conference Board consumer confidence, October (GS 100.4, consensus 100.0, last 103.0)

Wednesday, November 1

• 08:15 AM ADP employment change, October (GS +170k, consensus +150k, last +89k): We estimate a 170k rise in ADP payroll employment in October, reflecting stronger Big Data employment indicators.
• 09:45 AM S&P Global US manufacturing PMI, October final (consensus 50.0, last 50.0)
• 10:00 AM Construction spending, September (GS +0.5%, consensus +0.4%, last +0.5%)
• 10:00 AM JOLTS job openings, September (GS 9,200k, consensus 9,200k, last 9,610k)
• 10:00 AM ISM manufacturing index, October (GS 48.8, consensus 49.0, last 49.0):  We estimate the ISM manufacturing index edged down 0.2pt to 48.8 in October, reflecting a drag from the UAW strikes and a modest seasonal headwind, partially offset by the rebound in East Asian industrial activity. Our GS manufacturing tracker was unchanged on net at 49.4.
• 02:00 PM FOMC statement, October 31-November 1 meeting: As discussed in the FOMC preview, Fed officials appear to have signaled that they will not be hiking at their November meeting this week. We interpret their recent comments, recapped in our latest Fed Chatterbox, to imply that most would prefer not to hike again, consistent with our forecast that the FOMC will hold the funds rate at 5.25-5.5% until late next year. The market is pricing very little chance of a hike this week and only a roughly 20% probability of a hike at the December meeting.
• 05:00 PM Lightweight motor vehicle sales, October (GS 15.6mn, consensus 15.2mn, last 15.7mn)

Thursday, November 2

• 08:30 AM Nonfarm productivity, Q3 preliminary (GS +4.3%, consensus +4.0%, last +3.5%); Unit labor costs, Q3 preliminary (GS flat, consensus +0.7%, last +2.2%): We expect nonfarm productivity growth of +4.3% (qoq saar) in the Q3 preliminary reading. We expect unit labor costs—compensation per hour divided by output per hour—to remain flat in Q3 preliminary reading, which would increase the year-over-year rate to +0.8%.
• 08:30 AM Initial jobless claims, week ended October 28 (GS 210k, consensus 210k, last 210k); Continuing claims, week ended October 21 (GS 1,800k, last 1,790k): We estimate that initial jobless claims remained flat in the week ended October 28 and continuing claims increased by 10k to 1,800k due to residual seasonality.
• 10:00 AM Factory orders, September (GS +2.2%, consensus +1.7%, last +1.2%); Durable goods orders, September final (last +4.7%); Durable goods orders ex-transportation, September final (last +0.5%); Core capital goods orders, September final (last +0.6%); Core capital goods shipments, September final (last flat)

Friday, November 3

• 08:30 AM Nonfarm payroll employment, October (GS +195k, consensus +190k, last +336k); Private payroll employment, October (GS +160k, consensus +150k, last +263k); Average hourly earnings (mom), October (GS +0.20%, consensus +0.3%, last +0.2%); Average hourly earnings (yoy), October (GS +3.94%, consensus +4.0%, last +4.2%); Unemployment rate, October (GS 3.7%, consensus 3.8%, last 3.8%); Labor force participation rate, October (GS 62.8%, consensus 62.8%, last 62.8%): We estimate nonfarm payrolls rose by 195k in October (mom sa), reflecting a 225k underlying gain offset by a 30k drag from the United Auto Workers strikes. Big Data indicators indicate strong job growth on net, and initial jobless claims suggest a very low pace of layoff activity. We also believe tight labor markets may have incentivized a pull-forward of pre-holiday hiring. We estimate that the unemployment rate declined to 3.7%, reflecting a rise in household employment and unchanged labor force participation at 62.8%. We estimate a 0.20% increase in average hourly earnings (mom sa) that lowers the year-on-year rate to 3.94%, reflecting waning wage pressures and negative calendar effects (the latter worth -5bps month-over-month, on our estimates).
• 09:45 AM S&P Global US services PMI, October final (consensus 50.9, last 50.9)
• 10:00 AM ISM services index, October (GS 53.4, consensus 53.0, last 53.6): We estimate that the ISM services index edged down 0.2pt to 53.4 in October. Our forecast reflects a net decline in business surveys (our nonmanufacturing tracker fell 0.7pt to 51.1) but favorable seasonality and resilient consumer demand.

Source: DB, Goldman, BofA

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