To hear FactSet tell the story, the third-quarter earnings season, which starts this week, will be impressive.
FactSet (FDS), the big business data provider, is expecting corporate earnings to grow as much as 35% from a year ago. That’s up from overall Wall Street expectations of earnings growth around 25%.
If the earnings come close to either number, that might unleash a lot of buying from bulls.
But, first, investors will be judging everything against two giant external forces:
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The ongoing political turmoil unleashed by the U.S.-Israel war against Iran and the continuing ugly war between Ukraine and Russia.
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The U.S. midterm elections, which come in about three weeks on Nov. 3.
The backdrop: oil prices rule all
Increasingly, all these pieces of noise, for lack of a better term, are merging together into a kind of sonic boom that isn’t letting up.
Global energy prices have soared because of the Middle East turmoil that now includes war between Saudi Arabia and Houthi rebels based in Yemen. On Saturday, an attack on Saudi Arabia’s King Khalid International Airport killed at least 12 people and injured 300 to 399 more.
U.S. diesel and gasoline prices this year were at $6.28 a gallon and $4.36 a gallon as of Oct. 11, up 76% and 54%, respectively.
President Trump was talking about Russia adding 300,000 tons of diesel onto the global market, with more coming later on.
That assumes the supply is available. Ukraine attacks on Russian refineries have cut refinery runs as much as 27%, with diesel production down 20% to 30%.
Russia and Trump want Ukraine to stop its attacks. (Trump also called for Ukraine to replace president Volodymyr Zelenskyy.)
But Ukraine won’t stop unless Russia stops attacking its energy infrastructure. So far, there’s been no agreement.
And, of course, the U.S. midterms are coming, and President Trump is desperately trying to stave off major losses for the Republicans.
Earnings season begins with banks and their outlooks
That brings us to the earnings this week. These will predominantly come from financial institutions, including:
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Oct. 13 (Tuesday): JPMorgan Chase (JPM), Goldman Sachs (GS), UnitedHealth Group (UNH) and Wells Fargo (WFC).
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Oct. 14 (Wednesday): Bank of America (BAC), Morgan Stanley (MS) and BlackRock (BLK).
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Oct. 15 (Thursday): Charles Schwab (SCHW), Bank of New York Mellon (BNY) and US Bancorp (USB)
Financial stocks generally have struggled in 2026. The financial sector of the Standard & Poor’s 500 Index is basically flat on the year, according to Barchart.com data, while energy stocks are the leading sector, up 45%, followed by technology stocks, up 29.9%. The index is up 14.1%.
