Big Tech Earnings and GDP Data: What to Know This Week

Wall Street had a busy last week of October, as some of the market’s heaviest weights announced their financial results, and the government released a quarterly scorecard for the health of the US economy.

On the earnings front, tech giants Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (FB), Apple (AAPL), and Amazon (AMZN) – which alone account for nearly a quarter of the S&P 500 – will be the most closely watched names of the season. Earnings among 165 companies are due to release figures.

A batch of economic reports will also keep investors busy, with a preliminary reading of third-quarter GDP due out on Thursday. Economists expect advance estimates to show that the US economy grew at an annualized pace of 2.3% in the fourth quarter after back-to-back contractions in the first and second quarters, according to Bloomberg estimates.

Better-than-fear earnings so far helped push the major averages toward weekly gains of nearly 5% for each index on Friday, the best five-day performance since June for the S&P 500, Dow and Nasdaq. Fedspeak also noted that officials may discuss a slowdown in interest rate hikes at the end of this year has also fueled optimism among investors.

For the quarter, the number of S&P 500 that reported positive earnings surprises and the size of those estimates are still below the 5- and 10-year averages, according to data from FactSet Research. But the third-quarter earnings growth rate improved last week compared to the previous week.

Earnings from tech heavyweights Tesla (TSLA) and Snap (SNAP) leave little hope that their industry peers may continue the trend next week, with analysts disappointing Tesla’s revenue and Snap revealing the smallest revenue increase since the IPO. year 2017.

YoY, S&P 500 posts lowest profit growth since Q3 2020 (Source: FactSet Research)

On Tuesday, Alphabet, the parent company of Google, will be the first tech company to report. Analysts warned that macro issues such as negative currency headwinds are likely to drive down growth rates for companies, along with other companies in the huge tech lineup.

The strength of the US dollar has hit companies hard, with Citigroup strategists estimating that a 10% rise in the dollar will cut between $15 and $20 in earnings per share for the S&P 500. The dollar index is up more than 17% against a basket of other currencies. , including the euro and the yen. For US companies, this means that any revenue from abroad will decline when converted back into dollars.

Those headwinds are expected to show up in Amazon’s results Thursday, given that roughly 30% of the e-commerce conglomerate’s revenue is derived internationally, CFRA Research estimates. The same is true for Microsoft, where analysts at Goldman Sachs warned that “foreign currency headwinds are still reeling” even as demand remains well across the company’s business offerings for PC and cloud services.

For Apple, momentum in demand for the iPhone will be one of the biggest factors that stock watchers are watching. “Demand has held up better than expected in recent months,” Morgan Stanley analyst Erik Woodring predicted in a recent note.

Meta and Twitter (TWTR) will also release a report on Wednesday and Thursday, respectively, as part of the 72-hour tech earnings rollout.

Other notable financial results include Coca-Cola (KO), General Electric (GE), General Motors (GM), Ford Motor (F), Comcast (CMCSA), Visa (V), Mastercard (MA), and Exxon Mobil ( XOM), among others.

In economic data, GDP data is expected to show that the US economy grew in the last quarter after two consecutive negative readings — which fit the typical definition of a recession, even as the government said NBER’s panel of economists should officially declare a recession.

Economic releases on the calendar for this week also consist of the S&P Case-Shiller home price index, new and pending home sales data, and the Conference Board’s Consumer Confidence Index.

A specialist trader operates at the New York Stock Exchange (NYSE) in New York City, US, October 17, 2022. REUTERS/Brendan McDermid

A specialist trader operates at the New York Stock Exchange (NYSE) in New York City, US, October 17, 2022. REUTERS/Brendan McDermid

According to Pantheon Economics chief economist, Ian Shepherdson, the expected rebound in GDP, the broadest measure of economic activity, is attributed to the return of net exports, a correction from declines in the first and second quarters, and technical factors driving up inventory numbers.

“But the outlook for the first half of next year has darkened materially, and the chance of a short recession has increased, thanks to a significant and broad tightening of financial conditions,” Shepherdson added, pointing to higher rates across the curve, leading to widening corporate margins. Falling stock prices, the emerging extension in home prices, and a strong dollar.

Economic calendar

Monday: Chicago Fed National Activity IndexSeptember (0.00 during the previous month); Standard & Poor’s global manufacturing in the United StatesOctober 1st (expect 51.0, 52.0 over the previous month); S&P Global US Services PMIintroductory October (expect 49.6, 49.3 over the previous month); S&P Global US Composite PMIintroductory October (49.5 over the previous month)

Tuesday: FHFA Home Price IndexAugust (expected -0.6%, -0.6% over the previous month); S&P CoreLogic Case-Shiller 20 City CompositeMoM, August (expect -0.80%, -0.44% over the previous month); S&P CoreLogic Case-Shiller 20 City CompositeYoY, Aug (14.00% expected, 16.06% over the previous month); S&P CoreLogic Case-Shiller US National Home Price Index (15.77% over the previous month); Consumer confidence in the conference boardOct (expect 105.5, 108.0 over the previous month); Conference board current situationOct (149.6 over the previous month); Conference Board ExpectationsOct (80.3 over the previous month); Richmond Fed Manufacturing IndexOct (-5 forecast, 0 over the previous month)

Wednesday: MBA Mortgage Applicationsweek ending October 21 (-4.5% over the previous week);Developed goods trade balanceSeptember (expect $87.7 billion – $87.3 billion over the previous month); wholesale stockMoM, Sep 1 (1.1% expected, 1.3% over the previous month); retail stockMoM, Sep (1.2% expected, 1.4% over the previous month); NSA New Home SalesSeptember (expect 580,000, 685,000 over the previous month); New home salesMoM, Sep (-15.3% expected, -28.8% over the previous month)

Thursday: Annual GDPQuarterly, 3Q a (2.3% expected, -0.6% prior); durable goods ordersSeptember 1st (0.6% expected, -0.2% over the previous month); personal consumptionQuarterly, 3Q a (0.8% expected, 2.0% prior); Durable goods excluding transportationSeptember 1st (0.2% expected, 0.3% over the previous month); GDP price indexQuarterly, 3Q a (5.3% expected, 9.0% previously); Non-defense capital goods orders excluding aircraftSeptember introductory (0.2% expected, 0.3% over the previous month); PCE coreQuarterly, 3Q a (4.6% expected, 4.7% prior); Shipments of non-defense capital goods excluding aircraftPre-September (0.3% over the previous month); Unemployment Complaints Ratesweek ending October 22 (expect 225,000, 214,000 over the previous week); Ongoing Claimsweek ending October 15 (1.385 million over the previous week); Kansas City Industrial IndexOctober (Expect -2, 1 over the previous week)

Friday: Labor Cost IndexQ3 (1.2% expected, 1.3% over the previous quarter); personal incomeMoM, Sep (0.3% expected, 0.3% over the previous month); personal spendingMoM, Sep (0.4% expected, 0.4% over the previous month); real personal spendingMoM, Sep (0.1% expected, 0.1% over the previous month); PCE contractionMoM, Sep (0.3% expected, 0.3% over the previous month); PCE contractionYoY, September (6.3% expected, 6.2% over the previous month); PCE primary shrinkage deviceMoM, Sep (0.5% expected, 0.6% over previous month); Pending home salesMoM, Sep (-5.3% expected, -2.0% over the previous month); NSA Pending Home SalesYoY, Sep (-22.5% over the previous month); Consumer Confidence at the University of MichiganOctober Final (predict 59.7, ahead of 59.8)

earnings calendar

Monday: Bank of Hawaii (BOH), Krande (CR), Discover Financial Services (DFS), Logitech International (LOGI), Schnitzer Steel (SCHN), Zions Bancorp (ZION)

Tuesday: 3M (MMM), Alphabet (GOOG, GOOGL), Archer-Daniels-Midland (ADM), Biogen (BIIB), Boyd Gaming (BYD), Chipotle Mexican Grill (CMG) Chubb (CB), Coca-Cola (KO), General Electric (GE), General Motors (GM), JetBlue Airways (JBLU), Kimberly-Clark (KMB), Mattel (MAT), Microsoft (MSFT), Sherwin-Williams (SHW), Skechers (SKX), Spotify (SPOT) )), Texas Instruments (TXN), UPS (UPS), Valero Energy (VLO), Visa (V), Wyndham Hotels & Resorts (WH), Xerox (XRX)

Wednesday: Boeing (BA), Boston Scientific (BSX), Bristol Myers Squibb (BMY), Coursera (COUR), Ford Motor (F), General Dynamics (GD), Harley-Davidson (HOG), Hilton Worldwide Holdings (HLT), Kraft Heinz (KHC), Lending Club (LC), Meta Platforms (META), O’Reilly Automotive (ORLY), Spirit Airlines (SAVE), Thermo Fisher Scientific (TMO), Upwork (UPWK), VF Corp (VFC), Wingstop (WING)

Thursday: (AMZN), Apple (AAPL), Altria (MO), Ares Management (ARES), AutoNation (AN), Caterpillar (CAT), Capital One (COF), Comcast (CMCSA), CubeSmart (CUBE), Gilead Science (GILD), Hertz Global (HTZ), Honeywell (HON), Intel (INTC), Keurig Dr Pepper (KDP), Mastercard (MA), McDonald’s (MCD), Merck (MRK), Northrop Grumman (NOC), Oshkosh (OSK), (OSTK), Pinterest (PINS), Royal Caribbean (RCL), S&P Global (SPGI), Shopify (SHOP), Southwest Air (LUV), T. Rowe Price (TROW), Twitter (TWTR) )), T-Mobile (TMUS), Willis Towers Watson (WTW)

Friday: AbbVie (ABBV), AllianceBernstein (AB), Aon (AON), Bloomin’ Brands (BLMN), Colgate-Palmolive (CL), Exxon Mobil (XOM), Newell Brands (NWL), NextEra Energy (NEE)

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter Tweet embed

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