Wall St Week Ahead - US Stocks To Be Tested By Tesla, Netflix Earnings And Delayed CPI Report

* Q3 earnings rise, Netflix on Tuesday, Tesla on Wednesday * Delayed Sept CPI release on Friday * Also focus on US-China trade developments, regional banks (Updates with Trump-China, banking developments, latest market data) By Lewis Krauskopf NEW YORK, Oct 17 (Reuters) – Earnings reports next week, including from Tesla and US corporate profit, will look at Netflix delayed US inflation data will mark another test of the stock market, which has become more volatile even as it remains at record highs. The fourth year of the S&P 500’s bull run kicked off this week with some significant swings after a long period of market calm. Revived trade tensions between the US and China and concerns about credit at domestic US banks fueled the anxiety. The CBOE market volatility index, known as Wall Street’s “fear gauge,” has risen in recent days and hit its highest level in nearly six months on Friday. “The market is becoming more volatile, but it’s also coming out of a very non-volatile period where we haven’t had a lot of risk catalysts bubbling up,” says Michael Reynolds, vice president of investment strategy at Glenmede. “Once your valuations hit sort of full levels, as we’re seeing right now almost across the board, you have to be on the lookout for incremental risk catalysts.” The spark for the latest volatility was a surprising resurgence in US-China trade tensions. Shares fell late last week after the U.S. threatened to significantly raise tariffs by Nov. 1 over China’s rare-earth export controls. The US-China trade issue will be key for markets in the coming week, said Doug Beath, global equity strategist at Wells Fargo Investment Institute. US President Donald Trump confirmed on Friday that he will meet with Chinese President Xi Jinping in South Korea in two weeks. Sharp swings in global financial stocks at the end of the week also kept investors on edge as they weighed the extent of credit concerns emanating from domestic US banks. Major stock indexes posted weekly gains and are on track for strong years. The benchmark S&P 500 is up 13.3% year-to-date and 1.3% below its record high. But there are signs that the market is weakening below the surface. The percentage of S&P 500 stocks in some form of an uptrend fell from 77% in early July to 57% as of Tuesday, while the number of stocks in a downtrend increased from 23% to 44% over that time, according to Adam Turnquist, chief technical strategist at LPL Financial. That “narrowing gap highlights emerging cracks in the market’s foundation,” Turnquist said in written comments. Similarly, Kevin Gordon, senior investment strategist at Charles Schwab, said he will watch how broad-based the market’s gains are going forward. “If you have a smaller number of companies that are actually moving higher, but the indexes are moving higher because of the megacaps, that’s a very important difference,” Gordon said. Attention will be on third quarter earnings after major banks started the reporting season on a strong note. Aside from streaming giant Netflix and electric vehicle maker Tesla, other companies set to report in the coming week include consumer companies Procter & Gamble and Coca-Cola, aerospace and defense giant RTX and tech stalwart IBM. The corporate results and executive commentary will provide insight into the economy, as the US government shutdown since Oct. 1 has halted the release of economic data, including monthly employment data. Corporate “reports and what companies are saying is really our best shot at determining what the broader economic health is,” Gordon said. The government said it would release the US consumer price index for September on Friday, nine days late, saying the CPI data allows the Social Security Administration to meet deadlines for timely payment of benefits. The CPI report, which is a close gauge of inflation, will be released days before the Federal Reserve’s next monetary policy meeting on October 28-29. The US central bank is widely expected to cut interest rates again by a quarter of a percentage point, after weakening jobs data prompted the Fed to cut rates last month for the first time this year. “We’re really going to have to see something out of left field in terms of significant inflationary pressure to get the Fed off a rate-cutting path at the October meeting,” Glenmede’s Reynolds said. (Reporting by Lewis Krauskopf; Editing by Alden Bentley and David Gregorio)