What to Expect in the Week Ahead (AMZN, AMD, SMCI, AAPL, COIN Earnings; Fed Interest Rate Decision, Nonfarm Payrolls)
Earnings Preview
The forthcoming week is set to witness an upsurge in the corporate earnings season, with mega-caps $Amazon (AMZN.US)$ and $Apple (AAPL.US)$ slated to release their earnings on Tuesday and Thursday, respectively. Additionally, a plethora of consumer-facing companies such as $Coca-Cola (KO.US)$ are also expected to report their earnings.
Investors are eagerly anticipating whether $Amazon (AMZN.US)$earnings will once again serve as a catalyst for the stock price, as the e-commerce giant has pleasantly surprised with upside EPS in four out of the last five quarters and consistently exceeded revenue expectations in all of the past five quarters. According to FactSet, analysts expect a 12% increase in sales to $142.6 billion, with earnings per share predicted to rise by 170% to 84 cents per share.
Additionally, Amazon's cloud-computing division, AWS, is expected to see a 15% year over year sales growth, giving it two consecutive quarters of faster growth. Microsoft and Google have reported impressive quarterly results, citing AI and stronger overall cloud demand. This has also boosted the market's optimism about Amazon's report to a certain extent.
$Apple (AAPL.US)$ will report fiscal Q2 earnings as the share price trades down nearly 12% YTD, underperforming the broader market. This selloff is due to concerns over iPhone sales in China, a weaker consumer environment, and slow start to the AI race.
Wall Street analysts are anticipating Q2 EPS of $1.50 on revenue of $89.8 million, which is a decrease compared to Q2 2023's $1.88 on $117.51 billion. Apple is preparing for a lackluster quarter concerning iPhone sales. The firm's flagship product is encountering major obstacles in the pivotal Chinese market, where increased competition from domestic smartphone manufacturers is proving to be a significant challenge. Moreover, worldwide consumers are retaining their iPhone devices for longer periods before upgrading, which is further hindering demand and sales growth. Given that the iPhone is the primary generator of Apple's revenue, this projected decline in iPhone sales is likely to have an adverse effect on the firm's overall performance for the quarter.
Moreover, investors are also keeping a close eye on AI darling $Advanced Micro Devices (AMD.US)$ and $Super Micro Computer (SMCI.US)$ , as well as the cryptocurrency exchange $Coinbase (COIN.US)$, whose financial reports are also slated for release week ahead.
Job Figures and Fed's Interest Rate Meeting
The latest U.S. jobs report and the Federal Reserve's interest rate decision will be released along with more mega-cap earnings, which will be the main events for investors in the week ahead.
The Fed is scheduled to convene on Wednesday, and it is widely expected that interest rates will remain unchanged next week. According to the CME FedWatch tool, the market is currently pricing in only a modest 25 bp rate cut in 2024, a significant decrease from the six or seven cuts that investors had previously predicted for this year. Wall Street is eagerly awaiting insights into the state of the economy and the possibility of future rate cuts. Investors will also closely scrutinize Fed Chair Jerome Powell's remarks after the meeting, seeing if he has turned more hawkish after the recent data.
According to David Alcaly, the lead macroeconomic strategist at Lazard Asset Management:
" Three straight months of higher-than-hoped inflation challenges the idea that this is seasonal volatility, as Powell has acknowledged; At best, it delays rate cuts. At worst, it implies the Fed needs to slow the economy."
A labor market update is also set to take center stage, with the highly anticipated April nonfarm payrolls report scheduled for release on Friday. Economists are predicting 243,000 added for the month, which would represent a slight decline from March's impressive figure of 303,000 jobs added. The labor market has proven to be surprisingly robust thus far, showing that the economy can withstand the effects of rising interest rates and skyrocketing prices of consumer goods.
Sectors Performance
Source: Dow Jones, Market Watch, CNBC, Investing, finviz
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Gilley : yeah companies are doing great charging more to the consumer ever as there overhead dropped for months prices rose the whole time now the rising even more as inflation rises the American public is getting the stick will the companies of America eat all the carrots
JLTC : Do you have more details on *which* companies are doing that. with the rise of DTC brands, it's about the product, not the brand anymore. I like that it's not a separate forum and trading app...makes it easier to back the next winner. WSB Malaysian style would be interesting;)
Zspurr : Always article of the day
Eusebio : I can’t buy stock