Tech Heavyweights Scheduled To Report Earnings

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Key Takeaways

Amazon, Alphabet, Apple Among Those Reporting Earnings This Week

Decision On Interest Rates Coming Wednesday

Employment Report Coming On Friday

After five consecutive days of new highs, the S&P 500 closed down on Friday by 0.1%. The Nasdaq Composite dropped by 0.4%. For the year, that puts the S&P 500 up 2.5%, driven by and large by tech stocks. The technology subsector of the index is up 5.9%. But all of that could be meaningless as we head into the busiest week stocks have seen so far this year.

Earnings season is heating up and this week we’ll hear from 106 of the S&P 500 including Google
GOOG
parent, Alphabet, which is already up 8% this year. Microsoft
MSFT
, which boasts a $3 trillion market cap and is the most expensive company in the world, is also on deck. Both those companies are scheduled to release earnings on Tuesday after the close. Then on Thursday, AmazonAmazon” data-type=”stock”>
AMZN
, Apple
AAPL
, and Meta, which nearly tripled in 2023 and is up 11% to start the year, will all report.

Between those Tuesday and Thursday reports, the Federal Reserve Open Market Committee (FOMC) will announce their decision on interest rates. It is all but a foregone conclusion rates will be left unchanged at this month’s meeting. However, the post meeting press conference will be what markets focus on and whether or not the Fed anticipates rate cuts when they next meet in March. Currently, the odds of a rate cut in March stand at 50% according to the CME.

The Fed is largely influenced by the Personal Consumption Expenditures report, the most recent of which was released last Friday. The report was in line with expectations and showed prices are continuing to cool. In fact, Core
CORE
PCE was slightly weaker than expected, showing prices increased just 2.9% year-over-year. Another important report for the Fed, the Employment Situation, is due out this Friday.

Last week on the earnings front, we heard from both American Express
AXP
and Visa
V
. American Express, which is largely used by wealthier customers, provided an upbeat outlook for the year, while Visa maintained its outlook. The two reports together suggest consumers are continuing to spend at a healthy pace. This week UPS will report and I always find their earnings to be a good gauge for consumer spending. I think that once they report, you can more or less triangulate UPS with Visa and American Express for a good picture of how the overall economy is fairing.

Overseas, China continues to have issues with their real estate sector. A Honk Kong court ordered Evergrande to liquidate after the company failed to restructure $300 billion owed to banks and bond holders. Also, the combustible situation in the Middle East continues raising fears of spreading. Over the weekend, three U.S. servicemembers were killed when an unmanned drone struck a small base in Jordan. The U.S. is expected to retaliate for the attack and this could have an impact on oil prices. For now; however, oil is down slightly in premarket, trading under $78 per barrel.

For today, I’m expecting markets to remain relatively quiet ahead of a busy rest of the week. Between earnings, the FOMC announcement and Friday’s employment report, there will be plenty for markets to digest and today could just be a day of stretching before the sprint begins tomorrow. As always, I would stick with your investing plans and long term objectives.

tastytrade, Inc. commentary for educational purposes only. This content is not, nor is intended to be, trading or investment advice or a recommendation that any investment product or strategy is suitable for any person.