Société Générale Says U.S. Events May Support Credit or Avoid a Setback

Société Générale expects this week’s U.S. elections, employment data and corporate earnings to support credit markets or avoid a major setback, giving a recent bond recovery room to continue.

Company results have helped corporate debt regain ground across investment-grade and high-yield markets. The bank expects the coming earnings reports to add support, though the packed schedule puts the rebound in focus as investors weigh political and economic developments.

Tuesday’s congressional elections will determine control of the House and Senate for the next two years. Every House seat is on the ballot, along with about one-third of the Senate seats. The week’s earnings, election and jobs calendar also includes a new reading on the labor market.

The October Employment Situation report is set for 8:30 a.m. ET Friday, Nov. 6, from the Bureau of Labor Statistics (BLS). It will provide the nonfarm payroll count, unemployment rate and average hourly earnings, three measures of hiring and pay.

Palantir Technologies is scheduled to release third-quarter results after the market closes Monday, Nov. 2, with a webcast at 5 p.m. ET. Advanced Micro Devices (AMD) is due to report its fiscal third-quarter results after Tuesday’s close, with a conference call at 5 p.m. ET.

Société Générale identifies renewed geopolitical tensions, high oil prices and sharp moves in government bond yields as threats to the credit recovery. Any of those factors could put pressure on corporate debt even as company results provide support.

The bank expects credit spreads to narrow gradually through December, then face renewed pressure in the first half of 2027. In its debt preferences, it favors U.S. dollar-denominated investment-grade bonds over euro-denominated investment-grade bonds, and European investment-grade debt over high-yield securities. Its preferred sectors are financials, utilities, real estate and corporate hybrids.