China's economic growth accelerates in third quarter

9 hours ago

(AWP Alliance News) - European equities are called lower as France faced nationwide riots over the weekend, leading to 2,400 arrests.

Here is what you need to know before the European market open on Monday:

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MARKETS

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CAC 40: called down 31.8 points, 0.4%, at 7,924.90

DAX 40: called down 46.8 points, 0.2%, at 25,575.81

FTSE 100: called down 4.5 points, broadly flat, at 10,877.40

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Nikkei 225: down 0.8% at 64,786.20

S&P/ASX 200: up 0.3% at 8,828.10

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DJIA: closed down 175.28 points, 0.3%, at 52,002.41

S&P 500: closed down 84.62 points, 1.1%, at 7,659.44

Nasdaq Composite: closed down 572.99 points, 2.1%, at 26,140.03

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US 10-year Treasury yield: 5.07% (5.08%)

US 30-year Treasury yield: 5.41% (5.42%)

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EUR: lower at USD1.1228 (USD1.1248)

GBP: lower at USD1.3325 (USD1.3339)

USD: higher at JPY158.09 (JPY157.88)

gold: higher at USD4,178.49 per ounce (USD4,176.55)

oil (Brent): higher at USD107.81 a barrel (USD106.06)

(changes since previous London equities close)

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ECONOMIC CALENDAR

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08:30 EDT Canada CPI

10:30 EDT Bank of Canada business outlook survey

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TOP ECONOMIC NEWS

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China's economy expanded more quickly in the third quarter of 2026, according to figures from the National Bureau of Statistics. The NBS said China's gross domestic product rose 4.5% year-on-year in the third quarter ended September 30. This was compared to 4.3% in the second quarter, and ahead of the FXStreet-cited consensus of 4.4% growth. GDP reached CNY107.11 trillion, or USD16.028 trillion. On a quarterly basis, GDP rose 1.2% against 0.9% in the second quarter. This beat the consensus of 1.1% growth. Meanwhile, the urban surveyed unemployment rate was 5.2% in September, down against 5.3% in August. Retail sales rose 1.1% year-on-year in September, well above August's increase of 0.4% and clear of the 0.5% increase cited in the FXStreet forecast. Industrial production grew 5.5% year-on-year in September, ahead of August's 5.2% increase and the 5.4% growth consensus.

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The US budget deficit grew to almost USD2 trillion over the past year, government data showed, reaching its highest level since 2021 despite US President Donald Trump's promises to cut public spending. The expansion comes amid growing worries over the massive USD40.3 trillion US debt load and rising inflation, as the cost of borrowing climbs. Refunds of Trump's tariffs after they were overturned have further fuelled the budget gap. The federal deficit, which occurs when government spending exceeds its revenues, rose to USD1.99 trillion in fiscal year 2026, the Treasury Department said. This marked a 12% increase from the prior year, when the shortfall came in at USD1.78 trillion. A key driver of expenditures was the rising interest paid on public debt, which jumped USD144 billion to a record USD1.36 trillion. Interest costs on around USD32 trillion in publicly held US debt have been ballooning in recent years, and climbing bond yields have sparked further concerns.

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President Trump has defended his approach to the war in Ukraine, saying he does not want to drive Russia away from the negotiating table as he seeks to broker peace. "Great progress is being made" in efforts to end the war, Trump wrote on his Truth Social platform on Sunday. He also mentioned "current hostage negotiations," apparently referring to prisoners held by the warring sides, but gave no details. The US has sought to act as a mediator under Trump, but has yet to achieve a breakthrough towards ending the war. Trump faces accusations of neglecting Russia's war against Ukraine as he focuses on the conflict with Iran launched by the US. He said Russia was doing "very little, if anything, to help the Islamic Republic of Iran" compared with what it could do, adding that he wanted to keep it that way. US media have repeatedly reported Russian assistance to Iran.

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Washington has again rejected accusations of a deliberate throttling of the satellite internet used by Ukraine for military purposes, US Secretary of State Marco Rubio said. "No one at the White House ordered anyone to slow down internet or slow down speeds so that certain drones couldn't use it," Rubio told reporters before leaving for Uzbekistan. He left open what had caused the problems. "It sort of happened, but my understanding is it's been restored," he added. Rubio confirmed that Kyiv was using satellite internet for drone flights. The top US diplomat denied that Ukraine had access to the military internet system Starshield. "Starshield is a contract with the US military. It has nothing to do with Ukraine," Rubio said. "I know Ukraine wants access to Starshield... They've asked for access to it in order to conduct deep strikes inside of Russia. They do not have access to it at this moment," he explained.

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Rubio said that President Trump's waiver of sweeping sanctions and tariffs on Russia would be a 60-day pause to "analyse" their impact on the global economy. "The president wants to take the 60-day period of time to sort of analyse what imposing both sanctions and tariffs will mean to the global economy and even to the US economy," Rubio said, noting that the economic restrictions involved a number of countries, not just Russia. He said various conflicts were impacting global energy prices, including the US war on Iran and attacks on Saudi Arabia by Yemen's Houthis.

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Iranian Foreign Minister Abbas Araghchi said that Tehran supports a "political process" to resolve the conflict between Saudi Arabia and Yemen's Iran-backed Houthis. The Houthis have repeatedly attacked Saudi targets including energy facilities and Riyadh's international airport, where 13 people were killed in a major attack last week. "We support an inclusive and comprehensive political process as the only practical and sustainable way to resolve the issue," Araghchi said in a speech at the Organisation of Islamic Cooperation in Baghdad.

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Saudi Arabia announced on Sunday that it had intercepted more drones and missiles, which it said were fired by Yemen's Houthis, as the oil-rich monarchy is locked in a military escalation with the Iranian-aligned militia. Saudi air defences intercepted two ballistic missiles launched by the Houthis towards the south-western city of Khamis Mushait, the Saudi-led military coalition said. A spokesman for the Saudi-led military coalition fighting in Yemen, Turki al-Maliki, said the missiles were intercepted and destroyed, while two drones near the capital Riyadh were also intercepted. A third was intercepted in the oil-rich east of the country, according to al-Maliki. He provided no information on possible damage or casualties.

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France woke up Sunday to devastated streets after clashes between police and protesters, mass looting and fires erupted nationwide as marches against rising costs of living degenerated into "extreme" violence. The widespread unrest followed weeks of student protests and comes just six months ahead of elections to replace President Emmanuel Macron. Whole streets in Paris "have been devastated", the city's mayor Emmanuel Gregoire said as groups of masked young men torched parked cars and ransacked shops. French Prime Minister Sebastien Lecornu, who had condemned the "extreme intensity" of the violence, said 1,200 people had been arrested and 150 police officers hurt.

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Macron expressed the public's "anger" and "shame" over nationwide protests against rising living costs and poor conditions in schools that have resulted in at least 2,400 arrests. Macron echoed other government officials in blaming much of the violence on far-left activists, accusing them of attacking police and public buildings to foment chaos. "Those who looted will have to pay back for the damage, and those who sought to bring down the Republic will be held accountable," Macron said in a televised address to the nation. He denounced "unrestrained violence" by "insurrectionist elements from radical far-left groups, joined by numerous criminals". Macron earlier held an emergency meeting with senior government officials, a day after masked groups set fires and attacked public buildings, including city halls, in several cities. He said he had instructed prefects to work with mayors to protect public buildings and businesses in the coming weeks, including by banning protests when necessary.

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Embattled German Chancellor Friedrich Merz told a gathering of the youth wing of Germany's allied conservative parties, JU, that far-reaching social reforms and economic growth are prerequisites for his party's future electoral success at the national level. He warned the JU's "Germany Day" meeting on Saturday that, "if we have not managed, by the next federal election, to demonstrate that our social security systems have been reformed in a way that is future-proof and sustainable, then we will have no chance."

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The UK should cut public spending rather than raise taxes on banks, the IMF warned. Helge Berger, deputy director in the IMF's European department, was asked about the prospect of a hike in bank taxes at a press conference in Bangkok, Thailand, where the influential financial institution is holding its annual meeting. "I think the last two fall budgets had programmes that involved increasing government revenue. Ultimately, there's a moment where this becomes less productive, but there's still areas where Britain can make additional fiscal headroom available: modernising the property tax, broadening the tax bases of sales-oriented taxes like the VAT. These are good example," Berger said. "We wouldn't recommend increasing the labour tax. That's not a good thing for labour supply."

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COMPANY CALENDAR

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TOP COMPANY NEWS

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South32 maintained its full-year guidance as production rose across most of its assets in its first quarter. The Perth, Australia-based diversified miner said payable copper production at Sierra Gorda rose 11% quarter-on-quarter to 22,400 tonnes of copper equivalent in the three months to September 30 from 20,100 tonnes. This accounts for 24% of full-year expectations for the site. The site also saw the commencement of its fourth grinding line project, which South32 says will increase processing capacity by 25%. Payable zinc equivalent production at Cannington declined 27% to 59,200 tonnes from 81,600 tonnes in the previous quarter. The firm said a temporary reduction in paste backfill delayed access to planned stopes. Chief Executive Officer Matt Daley said: "We expect upgrades to the paste delivery system to support higher mining rates over the remainder of FY27, with continued processing of lower-grade stockpiles providing additional mill feed." Australia manganese production jumped 15% in the quarter to 902,000 wet metric tonnes, against 782,000 wet metric tonnes previously. Daley said: "Manganese had a strong start to the year, with production increasing by 14 per cent as Australia Manganese benefitted from improved operating conditions following the wet season and South Africa Manganese lifted underground productivity at Wessels." South Africa manganese rose 11% to 588,000 wet metric tonnes, from 528,000 wet metric tonnes in the fourth quarter of financial year 2026. Worsley alumina production rose 2.4% to 966,000 tonnes from 943,000 tonnes in the previous quarter. Meanwhile, Brazil alumina declined 1.7% to 345,000 tonnes from 351,000 tonnes. However, Brazil aluminium rose 8.1% to 40,000 tonnes from 37,000 tonnes the prior quarter. Hillside aluminium production fell 1.1% to 177,000 tonnes, from 179,000 tonnes previously. Daley said: "We've made a positive start to FY27, maintaining production guidance across all our operations and achieving key development milestones for our copper and zinc growth projects." Copper production guidance is kept at 90,200 tonnes, while zinc production guidance remains at 204,700 tonnes.

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Bendigo & Adelaide Bank reported weaker profit in its unaudited financial results for the first quarter of financial year 2027, despite total income increasing over the period. The Bendigo, Victoria-based lender said statutory net profit after tax declined 40% to AUD66.0 million in the first quarter ended September 30, around USD46.0 million, from AUD110.0 million in the same quarter a year earlier. Cash earnings after tax rose 3.8% to AUD112.7 million from AUD108.6 million. Total income increased 3.0% to AUD520.8 million from AUD505.8 million with net interest income 3.9% higher at AUD453.0 million and other income down 2.6% at AUD67.8 million. Total operating expenses edged up 0.5% to AUD348.0 million from AUD346.1 million. The bank reported credit expenses of AUD6.8 million, versus credit reversals of AUD300,000 previously.

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SoftBank Group is considering a deal to acquire security company Allied Universal, the Financial Times reported. The deal could value Allied at up to USD30 billion, including debt, the FT reported, citing people familiar with the matter. Allied acquired G4S, a former London listing, back in 2021 for GBP3.8 billion. Talks are at an early stage and there is no guarantee a deal will be struck, the FT added. SoftBank back in October of last year agreed a deal with ABB Ltd to buy the Zurich-based electrical engineering company's Robotics division for an enterprise value of USD5.38 billion. An Allied deal would boost SoftBank's robotics exposure. Allied's offering includes security robots and autonomous technology.

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Ampol said net sales rose in its third quarter on a strong uplift in its international segment. The Sydney-based petrol and convenience network operator said total group fuel sales volumes in the third quarter of 2026 ended September 30 rose 3.6% to 6.25 billion litres from 6.03 billion litres a year ago. Year-to-date sales volumes rose 0.4% to 18.55 billion litres, from 18.48 billion litres a year ago. In Australia, sales volumes were 3.55 billion litres in the quarter, down 2.3% from 3.64 billion litres year-on-year, while in New Zealand, sales volumes fell 5.3% to 853 million litres from 901 million litres previously. However, in its international market, Ampol said sales surged 23% to 1.84 billion litres from 1.49 billion litres the year prior.

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By Harvey Dorset, Alliance News reporter

Comments and questions to newsroom [at] alliancenews.com

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WEEK AHEAD:

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The following is a look ahead at the most important economic and corporate events globally in the days ahead.

Top economic events:

Tuesday 20 October

09:55 AEDT Australia RBA Assistant Governor Ellis Connolly speaks

09:15 CST China interest rate decision

10:00 CEST eurozone current account

11:00 CEST eurozone ZEW economic sentiment survey

11:00 CEST eurozone construction output

08:00 CEST Germany PPI

11:00 CEST Germany ZEW economic sentiment survey

10:00 CEST Italy construction output

10:00 CEST Italy current account

11:00 CEST Spain trade balance

08:00 CEST Switzerland trade balance

07:00 BST UK unemployment and average earnings

08:30 EDT US building permits

08:55 EDT US Redbook index

Wedneday 21 October

09:30 AEDT Australia RBA Deputy Governor Andrew Hauser speaks

08:50 JST Japan trade balance

07:00 BST UK CPI and PPI

07:00 BST UK public sector net borrowing

10:30 EDT US EIA crude oil stocks

Thursday 22 October

08:30 EDT Canada PPI

16:00 CEST eurozone consumer confidence

08:45 CEST France business confidence

09:30 CEST Swiss National Bank monetary policy discussion

11:00 BST UK CBI business optimism index

00:01 BST UK consumer confidence

08:30 EDT US initial jobless claims

10:00 EDT US Conference Board leading index

10:30 EDT US EIA natural gas stocks

11:00 EDT US Kansas City Fed manufacturing activity

Friday 23 October

09:00 AEDT Australia flash composite PMI

08:30 EDT Canada manufacturer sales

08:30 EDT Canada retail sales

10:00 CEST eurozone flash composite PMI

09:15 CEST France flash composite PMI

09:30 CEST Germany flash composite PMI

09:30 JST Japan flash composite PMI

08:30 JST Japan CPI

07:00 BST UK retail sales

09:30 BST UK flash composite PMI

09:45 EDT US flash composite PMI

10:00 EDT US Michigan consumer sentiment index

Top company events:

Tuesday 20 October

ABB Ltd - Q3 results

Anglo American PLC - trading statement

Bendigo & Adelaide Bank Ltd - AGM

BHP Group Ltd - trading statement

Bunzl PLC - trading statement

Carrefour SA - trading statement

Deutsche Boerse AG - Q3 results

Equifax Inc - Q3 results

EssilorLuxottica SA - Q3 results

GE Aerospace - Q3 results

General Motors Co - Q3 results

Michelin - Q3 results

Netflix Inc - Q3 results

Verizon Communications Inc - Q3 results

Yancoal Australia Ltd - trading statement

Wednesday 21 October

Abbott Laboratories - Q3 results

Aberdeen Group PLC - trading statement

AT&T Inc - Q3 results

Beach Energy Ltd - trading statement

Bureau Veritas SA - Q3 results

CSX Corp - Q3 results

Ferrovial SE - Q3 results

Fresnillo PLC - trading statement

Getinge AB - Q3 results

Hochschild Mining PLC - Q3 results

Iberdrola SA - Q3 results

IBM Corp - Q3 results

Lam Research Corp - Q1 results

Meta Platforms Inc - Q3 results

Moncler Spa - Q3 results

Moody's Corp - Q3 results

NextEra Energy Inc - Q3 results

Northern Star Resources Ltd - Q3 results

Philip Morris International Inc - Q3 results

Quilter PLC - trading statement

Reckitt Benckiser Group PLC - trading statement

SAP SE - Q3 results

Texas Instruments Inc - Q3 results

Transurban Group Ltd - AGM and Q3 results

UniCredit Spa - Q3 results

United Airlines Holdings Inc - Q3 results

Woodside Energy Group Ltd - Q3 results

Thursday 22 October

AJ Bell PLC - trading statement

American Airlines Group Inc - Q3 results

APA Group - AGM

Aurizon Holdings Ltd - AGM

Barclays PLC - Q3 results

Blackstone Inc - Q3 results

Brambles Ltd - AGM

Comcast Corp - Q3 results

Dow Inc - Q3 results

Fortescue Ltd - trading statement

Hermes International - Q3 results

Inchcape PLC - trading statement

Insurance Australia Group Ltd - AGM

Intercontinental Hotels Group PLC - trading statement

J Sainsbury PLC - half year results

Kering SA - trading statement

London Stock Exchange Group PLC - trading statement

L'Oreal SA - Q3 results

Nestle SA - Q3 results

Newmont Mining Corp - Q3 results

Nokia Corp - Q3 results

Pearson PLC - trading statement

Procter & Gamble Co - Q1 results

Rathbones Group PLC - Q3 results

Relx PLC - trading statement

Renishaw PLC - trading statement

Rentokil Initial PLC - trading statement

Roche Holding AG - Q3 sales 2026

Roper Technologies Inc - Q3 results

Sartorius AG - Q3 results

Sartorius Stedim Biotech - Q3 results

Schroder AsiaPacific Fund PLC - Q3 results

Schroder Oriental Income Fund Ltd - Q3 results

Southwest Airlines Co - Q3 results

STMicroelectronics NV - Q3 results

Thales SA - Q3 results

Unibail-Rodamco-Westfield SE - trading statement

VeriSign Inc - Q3 results

Vinci SA - Q3 results

Friday 23 October

American Express Co - Q3 results

ATOSS Software SE - Q3 results

Eni Spa - Q3 results

Holcim AG - trading statement

Mineral Resources Ltd - Q1 results

Safran SA - trading statement

Sika AG - Q3 results

Volvo AB - Q3 results

Here's what to watch for as the week unfolds.

TUESDAY: The UK labour market has shown signs of stabilisation in recent months with the unemployment rate stable at 4.9% since the spring, and analysts at RBC Capital Markets expect the latest release from the Office for National Statistics to show it remaining there again this month. RBC notes the fall in the number of vacancies has also slowed and the monthly Recruitment & Employment Confederation labour market survey has pointed to a more positive labour market backdrop in recent months. The latest survey for September showed the number of permanent placements rising to 50.9 points from 50.5 in August, the highest reading since September 2022. However, the HMRC PAYE based employment measure is still showing employment growth as mildly negative, RBC notes. Wage growth also has been relatively stable in recent months, and RBC expects a small tick-up in whole economy regular pay to 3.6% in the three months to August on-year from 3.5% in the period to July. This mainly reflects a pick-up in private sector wage growth to 3.1% in the three months to August versus last year from 2.9% reported for July.

TUESDAY: Following "reassuring" first-half results from Bunzl at the start of September, broker Peel Hunt expects few surprises from its third-quarter trading update. At the time, the London-based distribution and outsourcing company announced a new GBP500 million share buyback programme, to be completed over the next 12 months, and nudged up margin guidance. For 2026, Bunzl now expects operating margin to be broadly flat year-on-year compared to slightly lower on-year before. The FTSE 100 listing said it continues to expect modest underlying revenue growth after raising its outlook in June. Peel Hunt expects Bunzl to retain that guidance and expects capital allocation to remains a key theme. The broker notes Bunzl management made clear on the half-year earnings conference call that the slower pace of M&A over the past 20 months does not reflect the longer-term opportunity for strategically and financially accretive deals. Peel Hunt remains confident that the group can sustain the GBP300 million average annual spend achieved over 2020 to 2025. As a result, it thinks investors will be looking for evidence of greater momentum in the active M&A pipeline, with insight on committed spend in 2026 exceeding exceed 2025.

TUESDAY: Investors will be hoping third-quarter results can revitalise Netflix stock after an underwhelming run. Shares in the Los Gatos, California-based streaming service have fallen 42% in the past 12 months reflecting concerns over the lack of 'hit' content, slow engagement growth, revenue growth trajectory, and margin expansion. At the start of October, Co-Chief Executive Ted Sarandos told the Bloomberg Screentime conference in Los Angeles that the firm isn't growing as quickly as he would like. "Overall, we're not growing as fast as I want us to, and we're working on making that move faster," he said. Investors fear this may result in increased spend on new content, further weighing on margins. JPMorgan analyst Doung Anmuth says there is no "single silver bullet" to engagement and revenue growth, but rather a "series of ongoing initiatives, including most importantly, creating strong content". Goldman Sachs analyst Eric Sheridan notes that content success in the form of new hit TV series or movies could reverse the stock performance in short order. John Blackledge, analyst at TD Cowen, thinks emerging engagement vectors such as live and podcasts could lift engagement and drive member growth & retention. He expects 10% plus revenue growth and rising margins and free cash flow over the next few years.

For Netflix's recent quarter, Visible Alpha consensus forecasts revenue of USD12.87 billion, GAAP EPS of USD0.82, and operating margin of 33.2%. For guidance, revenue is projected of USD51.20 billion for the full-year with GAAP EPS of USD3.59 and an operating margin of 31.5%. Attention will focus on any comments regarding the outlook for 2027 with consensus looking for revenue of USD56.62 billion, on-year growth of around 11% and an upturn in the operating margin to 33.6%. Ahead of the earnings, reports have suggested Netflix plans to cut around 1,000 jobs as it seeks to improve profit.

TUESDAY: EssilorLuxottica heads into third-quarter earnings on the back foot. The stock has been under pressure throughout the year, down 47% year-to-date, which analysts say reflects increasing worries of new competition coming into the wearables category, a slowdown in wearables growth, concerns related to margin dilution, and worries over corporate governance. JPMorgan analyst Chiara Battistini says this means valuation has "now gone beyond the real risks on the company" and is pricing for a "real bear scenario".

For the recent quarter, JPM forecasts EssilorLuxottica sales up 7% to EUR8.37 billion, up 6.4% at constant currency, which would be a sequential slowdown versus 8.7% in the second quarter. UBS says that, while the quarter is unlikely to resolve all investors concerns about EssilorLuxottica, it should provide an important read-through ahead of particularly challenging fourth-quarter comparison and may help to determine the sentiment around smart glasses into 2027 and beyond. "The commentary on the product pipeline during the Meta Connect event, together with the potential upside from lenses, makes us positive, especially given current valuation," UBS says. The Swiss bank forecasts sales for EssilorLuxottica of EUR7.45 billion, up 6.5% at constant currency with direct-to-consumer growth of 10% and Professional Solutions growth of 2.5%.

WEDNESDAY: Shares in SAP have rebounded strongly from July lows, raising the bar a touch higher heading into third quarter. The Walldorf, Germany-based enterprise software company was caught in the cross-fire from disruption fears from artificial intelligence which have weighed on the overall software sector. However, the stock has rallied by around 50% since July. This was also helped by a second-quarter current cloud backlog positive surprise and recent upbeat commentary from SAP's chief executive at a conference in early September. Speaking at Goldman Sachs Communacopia & Technology Conference in September CEO Christian Klein said AI is accelerating customer demand for SAP's cloud products, rather than threatening its subscription business.

For SAP's third quarter, Jefferies analyst Charles Brennan is hopeful of no nasty surprises. "SAP news flow this year has been more volatile than we would have liked. But we are optimistic that 3Q26 will be less eventful. We expect continued robust new orders, while the 2Q26 message effectively reset the margin outlook. As SAP starts to prove out its agent capabilities, we expect the 'SaaSpocalypse' narrative to fade and for the re-rating to continue." Visible Alpha consensus forecast revenue of EUR10.11 billion, adjusted Ebit of EUR2.94 billion, and adjusted EPS of EUR1.78.

WEDNESDAY: Meta Platforms heads into third-quarter results in buoyant fashion. Shares in the owner of Facebook and Instagram have rocketed after a sticky start to the year, following the release of Meta's long-awaited large language model Muse. Downloads of the AI agent has topped 10.8 million globally since its launch early in September, with the stock price up around 35% since the middle of August. The launch has helped soothe some investor worries as to whether Meta will deliver a return on its ever increasing capex.

For the Meta's third quarter, TD Cowen analyst John Blackledge forecasts total revenue of USD63.7 billion, up 24% on-year, 1% above consensus, and versus management guidance of USD61 billion to USD64 billion. He estimates reported advertising revenue of USD62.3 billion, up 24% on-year, slowing from 28% growth in the second quarter. He forecasts operating income of USD21.9 billion, 7% above consensus, and EPS of USD7.35, 8.5% above consensus. For fourth quarter guidance, Blackledge eyes total revenue of USD74.2 billion, 1% above consensus. He looks for any further updates to Meta's 2026 operating expenditure guide of USD165 billion to USD169 billion, and the capex guide of USD130 billion to USD145 billion.

WEDNESDAY: Tesla joins Meta as the first of the 'Magnificent 7' to report September-quarter earnings, with the focus on margins in its core electric vehicle business and developments in the areas of robotaxis and robotics. Elon Musk's EV maker has already reported 486,532 deliveries for the third quarter, better-than-expected, and up 3.8% from 447,450 for the same quarter in 2025. Elsewhere, the focus will be the progress of full-self-drive technology, where analysts at Jefferies note take-up keeps improving in the US, while four EU countries have approved it and Germany looks "supportive". Robotaxis are dripping into service only slowly, Jefferies notes, while the all-electric semi-trailer truck is "finally going into production, even if visibility is low on the timing of actual orders". Updates for Tesla's Optimus robot will be of interest as well. Ahead of the results, Tesla showcased its its long-awaited second-generation Roadster, a vehicle developed in collaboration with SpaceX. It combines conventional automotive engineering with rocket propulsion technology. Production is targeted for 2028, compared with the original 2020 delivery target announced when the vehicle was first unveiled in 2017.

For the Tesla's recent quarter, Jefferies forecasts revenue of USD29.2 billion, automobile gross margin of 16.7%, adjusted earnings before interest and tax of USD781 million, and "cash burn" of around USD5 billion. Elsewhere, the focus will be on any commentary around a link-up with Musk's SpaceX, amid speculation that the two firms will eventually merge. "Growth prospects and funding needs of SpaceX, business convergence with Tesla (Grok, Starlink, Terafab) and Elon Musk's desire for control continue to argue for merging with SpaceX, sooner rather than later to execute projects, notably Terafab where Tesla is investor and customer," Jefferies says.

WEDNESDAY: After a hiccup in its first quarter, due to a weak cold and flu season, sales growth has recovered at Reckitt Benckiser. The Uxbridge, London-based consumer goods firm, which owns products such as Nurofen painkillers, Strepils throat sweets and Dettol antiseptic, reported like-for-like sales growth of just 0.6% in the first three months of the year, and a 1.3% LFL increase in core Reckitt, the firm's high-growth 'Powerbrands'. Sales LFL growth recovered in the second quarter to 4.7%, with core Reckitt LFL sales growth of 4.2%. For the third quarter, UBS expects LFL growth to have slowed 3.7%, in-line with Visible Alpha consensus, with core Reckitt LFL up 4.2% versus VA consensus at 4.1%. UBS expects Europe should improve sequentially to flat from down 1.5% in the prior quarter, North America growth to slow to 1.0% from 2.8%, and Emerging Markets to remain in stable at 9.5%, compared to 9.4% in the second quarter. In Emerging Markets, UBS forecasts a slightly different mix, with China slower but strong momentum in India and continued acceleration in Reckitt's smaller developing markets. For Reckitt's infant formula business Mead Johnson, UBS expect 1.0% LFL growth. Overall, UBS forecast revenue of GBP3.39 billion.

WEDNESDAY: UK inflation is expected to accelerate in September with higher energy prices continuing to put upward pressure on the cost of living. Deutsche Bank Research expects UK inflation to push to its highest rate all year, with headline CPI rising by 3.4% on-year in September, accelerating from 3.1% in August, with core CPI inflation pushing up to 2.7% from 2.6%. Services CPI inflation also is forecast to rise, picking up pace to 3.7% on-year from 3.4% in August. Barclays says increased petrol prices should drive close to two-thirds of the increase in the annual rate of headline CPI, and it expects small accelerations in core goods, services and food, alcohol and tobacco. Barclays tracks energy price inflation accelerating to 18% on-year in September from 14% in August and sees pump prices up by 5.3% on-month. Barclays also expects food, alcohol and tobacco price growth to accelerate to 1.8% on-year in September from 1.6% in August. On transport and travel services, Deutsche expects a big drop in September. Airfares will have fallen in September, it says, projecting a near 21% on-month decline. Looking ahead, Deutsche expects price pressures to increase further. It notes energy prices remain on the ascent and lower harvests, after a hot and dry summer in the UK, have already starting to show up in food cost price data. Deutsche sees CPI taking another step up, with 2027 CPI inflation averaging 3.7%, up from 3.2% this year.

THURSDAY: Sales growth is expected to have accelerated at Procter & Gamble in its financial first quarter, driven by improving growth in the US and a possible pick-up in China. The Cincinnati, Ohio-based consumer goods firm owns brands such as Head & Shoulders and Pantene hair care, Olay skincare, and Pampers baby care products. It reported organic sales increased 1% in the three months to June. Citigroup analyst Filippo Falorni thinks this could accelerate to 3% in the September quarter, with improved fortunes in the US and potential upside in China offsetting cost headwinds in freight and oil. Combined with a likely stronger topline outlook, he thinks P&G can maintain its FY27 EPS guidance for an increase by between 1% and 5% from USD6.62, while core EPS is expected to be between flat and 3% higher from USD6.89. This implies core EPS of between USD6.89 and USD7.11 in FY27. Bank of America is also optimistic heading into the P&G print. Earlier in October, P&G raised its first quarter organic sales growth forecast to 2.5% from 1.7%, driven by improvement in scanner trends netting to higher organic sales estimates for the Beauty, Fabric & Home Care, and Baby, Feminine, Family Care segments. To account for incremental intra-quarter freight pressure, BofA lowered first quarter gross margin by 20 basis points, resulting in unchanged adjusted EPS of USD1.87 for the three months.

THURSDAY: Barclays kicks off the UK banking reporting season with fears the sector could be the target for John Healey in the October government budget. While the UK chancellor has called banks some of "the crown jewels" of the UK economy, he is yet to rule out a tax hit. Senior banking executives have told the BBC they expect the sector to be "on the menu" when the budget is unveiled in two weeks time. In the clearest sign yet that the sector could be targeted, the Guardian reported that Healey will increase the surcharge tax on the banks. The UK's biggest banks and building societies currently pay a surcharge of 3% on top of the baseline 25% rate of corporation tax, plus a levy on the assets held on their balance sheets. The 3% surcharge was reduced from 8% under former Chancellor Jeremy Hunt, at the same time as he raised corporation tax from 19% to 25%. Returning the surcharge to its previous level could raise around GBP2 billion a year, analysts think. Citigroup analyst Andrew Coombs points out after factoring in the existing 3% surcharge and bank levy UK banks already operate with a total tax rate of 46%, among the highest globally. He thinks any further increase risks impeding on lending supply.

More positively, Citi's Coombs says UK bank fundamentals remain healthy. "The structural hedge is now being reinvested at higher yields, system loan growth is still running at [around] 5%, driven by corporate re-leveraging, and delinquencies remain low," he says.

For Barclays's third quarter, Visible Alpha consensus looks for net income of GBP7.08 billion, expenses of GBP4.47 billion, underlying pretax profit of GBP2.60 billion, and adjusted EPS of 12.5p. How the Barclays investment bank performs will be of interest in light of mixed showings from US peers, as will the expenses outlook.

THURSDAY: HSBC expects Hermes to report sequentially lower sales growth reflecting the macro backdrop and weak consumer sentiment. Analyst Anne-Laure Bismuth expects the Paris-based luxury goods firm, famous for its silk scarves, to report organic sales growth of 5.3% in the third quarter, slowing from 6.7% in the second quarter. By region, Bismuth believes Europe could improve sequentially, even if the performance in France is likely to have been affected by the summer heatwaves. Japan should still be "solid", she says. Asia ex-Japan should remain "muted", and here the analyst expects a sequential slowdown to a flat performance. In the US, the pricing component in the quarter should be a bit less supportive than in the prior three months, but organic growth should still be in the double-digit region. By product category, the leather goods division should be in line with the second quarter at 10%, while Bismuth expects sales growth outside the leather goods category to remain soft at an average of 2% organically, slowing down sequentially.

THURSDAY: Kering is expected to report a slight drop in third-quarter sales as it continues to work on improving fortunes at its flagship Gucci brand. Analysts trimmed forecasts for the Paris-based luxury goods manufacturer after a pre-close call where management was said to have struck a cautious tone on current trading, noting that the consumer environment has deteriorated since July's guidance of a flattish quarter. JPMorgan expects a 1.0% decline in third quarter sales to EUR3.29 billion, or 3% at constant exchange rates, slowing sequentially from 2% growth in the second quarter. HSBC analyst Anne-Laure Bismuth expects a weak showing from Gucci with sales down 5% year-on-year reflecting the wider macro backdrop that applies to the rest of the luxury industry, as well as three brand-specific key challenges. These are: less of a newness effect than in the second quarter; continued traffic constraints continue; and a tougher comparison that the prior quarter. JPMorgan sees Gucci sales down 6%, or 7%, at constant exchange rates, with Fashion & Leather Goods down 3%, or 4% at constant rates. Jewellery sales are seen up 13%, or 11% at constant rates, with Eyewear growth of 4%, or 3% at constant rates.

THURSDAY: Investors will be looking for Nestle to deliver another quarter of steady sales growth and reiterate guidance when it updates on trading for the three months to September. The Swiss firm, which owns brands such as Nescafe coffee, Kit Kat confectionery and Perrier water, is expected to report organic sales growth of 3.3% in the quarter, slowed from 3.7% in the previous three months. Real internal growth is projected at 1.4% as the company charts a path towards a 2% target. The warm weather is thought likely to have improved performance in its Waters & Premium Beverages division, but a weak consumer environment in the US and challenging retail backdrop in Europe is likely to limit further progress. Emerging Markets should remain the bright spot as China continues to grow despite a weak end-market with continued share gains, although India is likely to moderate as it faces tougher comparisons. Investors will watch for easing US PetCare destocking and the impact of pricing on coffee demand.

THURSDAY: Analysts expect few surprises from Relx's third-quarter trading statement but it could nonetheless support the shares. Shares in the FTSE 100 listing have recovered from February lows when the stock was rocked by fears that the provider of information-based analytics and decision tools could be disrupted by artificial intelligence. Bank of America expects underlying revenue growth across the three core divisions - Scientific, Technical & Medical, Risk and Legal - of 6%, 8% and 10%, respectively, and 7% at group level, in line with the first half run-rate, and offering few surprises. In Exhibitions, BofA expects growth to soften as the impact of Middle East disruption is heavily third-quarter weighted. Overall, BofA expects a repetition of full-year guide across all divisions. JPMorgan analyst Daniel Kerven forecast nine-month group organic growth of 7%, comprising 8% growth for Risk, 10% for Legal, 6% for STM and 3% for Exhibitions.

THURSDAY: Shares in Rentokil Initial have faltered amid cautious comments from US sector peer Rollins, raising worries about growth in its key North American market. In September, Rollins Chief Executive Jerry Gahlhoff and Chief Financial Officer Will Harkins told a JPMorgan conference in London that since July demand has stayed "choppy and early green shoots failed to hold". Crawley, England-based pest control specialist Rentokil reported US revenue of USD4.18 billion in 2025, around 61% of total group sales of USD6.91 billion. The FTSE 100 listing boosted its presence in the US with the USD6.7 billion acquisition of Terminix in October 2022, but integration missteps forced Rentokil to issue multiple profit warnings. The latest setback came in July when Chief Executive Mike Duffy, who took charge in March, said the firm was "retiring" its North America margin target of 20% in 2027 to reflect increased investment in the region. Stifel analyst Sam Dindol notes the share selloff left Rentokil's share price and valuation at their lowest levels since 2018 and 2015, respectively. Jefferies analyst Allen Wells forecast third quarter group organic growth of 3.2%, including North America Pest slowing to 2.0% from 2.4% in the second quarter. Weak second-quarter exit rates were partly attributed to softer termite business activity and housing market weakness, both of which appear to have persisted through the summer, he says. "While expectations have reset lower, Q3 needs to show that growth pressures remain contained and operational initiatives are beginning to improve lead generation or conversion," Wells adds.

THURSDAY: First-half results from J Sainsbury come on the back of an impressive performance from grocery peer Tesco and following reports that Sainsbury held merger talks with Morrisons. Analysts point out grocery trading has been supported by an easing in UK food price inflation, which moderated to 2.1% in August from 3.0% in June before ticking modestly higher to 2.3% in September, helping to support a return to positive volume growth across the industry. Beyond the inflation backdrop, Bank of America notes retailers benefited from unusually supportive external factors. Record temperatures in late May, further heatwaves in June and July, and a summer packed with sporting events, boosted demand for seasonal categories such as soft drinks, ice cream, bottled water, beer, convenience foods, fresh produce and barbecue-related products, the broker notes. "While activity softened with the end of the summer holidays and the return to school in September, the quarter still represented a clear improvement versus the more challenging start to the year," BofA says. Analysts note this will be the first set of results presented with Argos classified as a discontinued operation by Sainsbury following the announced disposal of the non-food retailer. BofA forecast first half grocery sales growth of 3.5%, sales of GBP16.3 billion excluding Argos, with underlying operating profit increasing 2.5% to GBP519 million and underlying pretax profit rising 4.5% to GBP355 million. For the full-year, Sainsbury expects underlying operating profit of between GBP975 million and GBP1.08 billion and retail free cash flow of more than GBP500 million.

Elsewhere, Sainsbury management will no doubt face questions about reports linking it to merger talks with fellow grocer Morrisons. A merger which would result in a combined 24% market share. In 2019, the Competition & Markets Authority, the UK's competition regulator, blocked a merger between Sainsbury and Asda which would have resulted in a combined entity with around 30% market share.

FRIDAY: UK 'flash' purchasing managers index readings for October are likely to confirm to more positive economic outlook, although services sector expansion is thought likely to have slowed. For October, RBC Capital Markets looks for the manufacturing PMI and services PMI to move in opposite directions, mainly due to what happened to new orders in both sectors last month. New orders in manufacturing posted an improvement to 51.2 index points in September from 50.6 previously, despite a dip in output. In contrast, firms in the services sector saw the growth of new orders slow to 50.3 points in September which was reflected in a dip in business optimism. As a result, RBC look for the services PMI to deteriorate to 51.8 points from 52.1 previously, remain in growth territory.

For Europe, RBC expects to see a drop in the euro area composite PMI in October. It notes the outlook for Europe has weakened on two fronts. Generally prices, particularly diesel and gas, have continued to worsen and there are also now fresh concerns about the budget situation in France, high interest rates, and fiscal sustainability. Therefore RBC expects the eurozone composite PMI to fall to 52.0 points in October from 53.1 in September, also still remaining in growth.

Week Ahead by Jeremy Cutler, Alliance News reporter

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