US bank earnings, China GDP, Booker Prize
The FT's Daniel Garrahan previews some of the big stories the Financial Times is watching this week, including US bank earnings, a Queen's Speech in the UK, China's third-quarter GDP and the winner of the 2019 Booker Prize
Filmed by Nicola Stansfield. Edited by Petros Gioumpasis. Produced by Daniel Garrahan
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Here are just some of the stories the Financial Times will be watching in the week ahead. It's a big week for US bank earnings. There's a Queen's Speech in the UK. But can Boris Johnson get his legislative programme through parliament? China reports third-quarter GDP, and the winner of the 2019 Booker Prize will be announced.
First to the US, where bank analysts and investors are braced for one of the biggest earnings days they've ever seen on Tuesday. Wells Fargo, JPMorgan Chase, Citigroup, and Goldman Sachs will all unveil their third-quarter earnings within a few hours of each other. The banks decided en masse to avoid reporting on the Columbus Day holiday. Numbers from Bank of America and Morgan Stanley will follow later in the week, but the backdrop is gloomy.
Escalating trade tensions are bad news for the big global companies that banks sell their services to. Painfully slow progress on Brexit is also contributing to a general sense of uncertainty, which is prompting banks' corporate clients to hold fire on big investments or deals. And then there's the interest rate environment, where low rates and an inverted yield curve are making it harder for banks to earn a return on their core lending activities.
Not all banks are equally afflicted. A Bloomberg analysts' poll shows Citigroup third-quarter earnings for 2019 are expected to be almost 13 per cent higher than the same period in 2018. At Goldman Sachs, third-quarter earnings are expected to fall almost 18 per cent year-on-year.
Now, the Queen's Speech on Monday will see the British monarch set out the government's legislative programme for the new parliamentary session. The prime minister Boris Johnson has defended his decision to suspend parliament for a second time to make way for the speech. Mr Johnson insists that it will allow him to deliver on the people's priorities, and he hopes to set out plans for the NHS, tackling crime, schools, investing in infrastructure, and building a strong economy. It will, in effect, see the Queen read out the contents of the next Conservative manifesto. But since Mr Johnson has no Commons majority, he can't expect to put any of his proposals into law in this parliament.
There are no guarantees that Boris Johnson facing a hostile House of Commons that have already defeated him seven separate times since he became prime minister, will be able to get his legislative agenda through the House of Commons without a Conservative majority. If he loses the vote next week, we can expect to see leaders of the opposition renew calls for his resignation and potentially even trigger a vote of no confidence.
But the prime minister's allies aren't too worried, because going into an election, this will all feed into the narrative that parliament are blocking not only Brexit, but also the prime minister's domestic agenda to pass bills and keep the country going.
In recent years, China has contributed close to 30 per cent of total global economic growth, so even small fluctuations can make a big difference. When Beijing reports third-quarter GDP growth rate this week, it's likely to show a continued slowing trend. Most investment banks predicted a slip to around 6 per cent, down from 6.2 per cent in the previous quarter. That would register as the slowest rate of growth for some 27 years. But it would also mask that in September activity showed signs of picking up. Consumer price inflation is expected to edge up a little to 2.9 per cent. The retail sales growth may pick up to around 8 per cent in September. That's up from 7.5 per cent in August.
And finally, a novel about daily life in today's middle America, all executed in one sentence that runs through a thousand pages, the post-mortem meditation of an Istanbul prostitute on her life, the revisiting of Don Quixote's epic journey transposed to Trump's America. These are just three of the stories that have made the cut for this year's Booker Prize shortlist.
Six titles in all, notable for two of the names on there, Margaret Atwood and Salman Rushdie. He's written the reimagining of Don Quixote. Atwood has done a follow-up to her roaraway success, The Handmaid's Tale. Her new book is called The Testaments.
And they and all the other titles, while very different in many ways, and in terms of their form and subject matter - some of them take us to Nigeria, others to northern England - what they do is offer a commentary on the world that we're living in now. And they're in that way often quite political and quite critical of the world that we're living in right now. And that, I think, is one of the distinguishing features of the Booker Prize List for 2019.
And that's what the week ahead looks like from the Financial Times in London.