The earnings season enter into its busiest phase in the coming week, with most of the focus will be on the quarterly earnings result of five big-name mega-cap tech companies – Facebook ($FB), Amazon ($AMZN), Apple ($AAPL), Microsoft ($MSFT), and Google-parent Alphabet ($GOOGL), Market participants will also be bracing for heightened volatility on the economic data front the release of the first estimate of Q1 GDP (Advance GDP QoQ), alongside durable goods orders, and personal income and outlays. This should lend further support to the notion that the economy is continuing to recover from its virus-related slowdown.
New spending and tax proposals from the White House, along with Federal Reserve Policy Decision will also be in focus.
Here is what you need to know to start your week.
S&P500 (US Market)
The benchmark index ($SPX) traded with a muted tone, losing -0.14% (-5.7 points) for the week. With $SPX trading flat, a pause in the existing rally is plausible with the previously highlighted Bearish Divergence of $SPX remains valid, as sessional volume remains below its 50 days average range for the past week without any committed buying pressure reflected in this rally.
With almost one-third of Dow ($DJI) and S&P500 ($SPX) companies reporting earnings this week, the immediate support to watch for $SPX is now at 4,110 level, a minor week long support coinciding with break of 20D MA level.
FAAMG + Tesla TSLA Earnings
There are about 180 S&P 500 companies, including 10 Dow components, reporting corporate results in what will be the busiest week of the first quarter earnings season on Wall Street. Most of the focus will be on the five big-name mega-cap tech companies – Facebook ($FB), Amazon ($AMZN), Apple ($AAPL), Microsoft ($MSFT), and Google-parent Alphabet ($GOOGL) – collectively known as the ‘FAAMG’ group of stocks. All five are set to enjoy another quarter of blockbuster earnings and sales growth, given their growing dominance in the tech space.
Software and cloud giant Microsoft and internet search titan Google are both expected to release their latest numbers on Tuesday after the markets close.
Tech and consumer electronics conglomerate Apple and social media company Facebook then follow with their respective earnings after the bell on Wednesday.
E-commerce and cloud behemoth Amazon is slated to release Q1 results after the market closes on Thursday.
Meanwhile, Tesla ($TSLA) – the sixth most valuable company listed on the New York Stock Exchange – reports on Monday.
Some of other high-profile tech names reporting this week are Advanced Micro Devices ($AMD), Twitter ($TWTR), Pinterest ($PINS), Shopify ($SHOP), eBay ($EBAY), Qualcomm ($QCOM), and Texas Instruments ($TXN).
Boeing, Caterpillar , GE Highlight Blue Chip Earnings
Staying on the earnings front, a diverse group of blue chips, such as Boeing ($:BA), Caterpillar ($CAT), General Electric ($GE), 3M Company ($MMM), Visa ($V), Mastercard ($MA), and United Parcel Service ($UPS) will also report their latest quarterly results this week.
Q1 reports from restaurant operators McDonald’s ($MCD), Starbucks ($BUX), and Domino’s Pizza ($DPZ) are also on the agenda, as are corporate results from automakers Ford Motor Company ($F), and Nio ($NIO).
Pharmaceutical companies, like AstraZeneca ($AZN), Merck ($MRK), Bristol-Myers Squibb ($BMY), and Gilead Sciences ($GILD) are all on the docket as well.
Finally, Big Oil majors, ExxonMobil ($XOM) and Chevron ($CVX), are both set to round up the week when they release their latest earnings on Friday.
The Q1 corporate earnings season has gotten off to a strong start, with 86% of companies reporting earnings beats so far, according to Refinitiv.
Federal Reserve Rate Decision
The Federal Reserve is not expected to take any action on interest rates at the conclusion of its two-day policy meeting at 2:00PM ET on Wednesday, keeping it in a range between 0.0%-0.25%.
Fed Chair Jerome Powell will hold what will be a closely watched press conference 30 minutes after the release of the Fed’s statement.
Powell is widely expected to defend the central bank’s policy of letting inflation rise above its 2% target, reiterating his message that the recent pick-up in prices is seen as temporary.
U.S. Advanced Q1 GDP
Investors will keep an eye on a preliminary reading of first quarter U.S. gross domestic product (GDP) for fresh clues on the strength of the economy.
The data is expected to show the economy expanded at an annual rate of 6.5% in the January-March period, accelerating from growth of 4.3% in the previous quarter.
