What to Expect in the Week Ahead (MSFT, META, AAPL and AMZN Earnings; FOMC and US Nonfarm Payrolls)

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What to Expect in the Week Ahead (MSFT, META, AAPL and AMZN Earnings; FOMC and US Nonfarm Payrolls)

After an underwhelming start to earnings from the magnificent 7, Microsoft, Meta, Apple, and Amazon will release earnings this week.

$Microsoft (MSFT.US)$ is set to report fiscal Q4 earnings after the close on July 30. Expectations are EPS of $2.93 on revenue of $64.38 billion. This marks a 9.3% and 14.6% increase, respectively, compared to last year's period.

Beyond the headline figures, investors will be watching for sustained growth in Microsoft's cloud platform Azure, which has been fueling sales and earnings growth in previous quarters. Azure has benefited from the AI boom as customers train and run AI workloads through the cloud platform. Cloud revenue is expected to reach $37.2 billion. Furthermore, investors will also be watching closely commentary on AI as the firm has established itself as an early leader in the sector.

$Meta Platforms (META.US)$ will report its second-quarter earnings after the market closes on Wednesday, July 31. Wall Street expects an EPS of $4.70 and a revenue of 38.29 billion.

The market will be keen to see if there are any further increases to expense projections and the impact of AI integration. Meta has emphasised that AI integration in its products contributed to strong Q1 results. Investors will seek an update on how this could continue improving user engagement.

Elsewhere, advertising performance will also be in focus. Advertising revenues increased by a solid 27% in Q1.

$Apple (AAPL.US)$ will release Q3 earnings on August 1, after the market closes. Wall Street expects EPS of $1.34 on revenue of $84.3 billion.iPhone revenue is still the bellwether for the Apple business, making up the majority of total revenue.

iPhone sales have seen headwinds amid slowing global cycles and greater competition in China, and attention will be on whether those headwinds are starting to evaporate.

Gross margins will also be under the spotlight amid a steady upward trajectory over the past few years, lifted as the firm has bought more of its supply chain in-house and grown its IT services businesses. The service business is anticipated to continue its strong performance thanks to higher App Store sales and rising subscription services.

AI developments will also be closely watched, with any updates on Apple's new generative AI software, Apple Intelligence, also closely watched. Apple intelligence is expected to drive a device upgrade cycle that could boost iPhone and iPad sales.

$Amazon (AMZN.US)$ is scheduled to release earnings after the market closes on August 1. Wall Street expects EPS of $1.01 and revenue of $148.54 billion, while Amazon guides for 144.00 billion to $149.00 billion.

EBIT is expected to increase 17% in Q2 and 10% in Q3, boosted by improved profitability in North America and accelerated growth of Amazon Web Services. E-commerce and advertising had a strong showing in Q1, which investors will be keen to see continue this quarter.

$Pfizer (PFE.US)$ ， $Advanced Micro Devices (AMD.US)$ ， $Qualcomm (QCOM.US)$ ， $Arm Holdings (ARM.US)$ ， $Intel (INTC.US)$ ，and $Coinbase (COIN.US)$ are also expected to report their earnings this week.

Key economic reports to watch this week include Wednesday's US Fed interest rate decision and the US nonfarm payrolls for July on Friday.

Jerome Powell's policy statement and press conference will be closely watched to gauge the level of confidence the FOMC has that inflation is on a sustainable path to the 2% target. The target range for the fed funds rate is set to remain at 5.25% to 5.50% after the July policy meeting, which would mark the 8th consecutive meeting at which rates have been held steady. Markets are currently pricing in an 88% chance of a September rate cut amid signs of cooling inflation and an uptick in the unemployment rate.

Economists are expecting the U.S. economy to have created 177,000 jobs in July, moderating from 206,000 in the prior month. The unemployment rate, which has ticked higher in each of the past three months, is expected to hold steady at 4.1%.