This week is the midpoint of earnings season, with big tech companies like Google, Microsoft, Amazon, and Meta expected to report their earnings. Stock futures fell on Monday due to the anticipation of these earnings reports and new economic data.
Dow Jones Industrial Average futures fell by 89 points or 0.3%, while S&P 500 and Nasdaq-100 futures dropped 0.3% and 0.4% respectively. The previous week saw a decrease in the major indexes as earnings season started, with several significant banking names posting their quarterly results.
Around 76% of S&P 500 companies that reported earnings through Friday exceeded analyst earnings estimates. While there may be some uncertainty and volatility, we anticipate more positive results as the negative has already been factored in. However, investors should plan for a long-term investment horizon.
Investors are also watching out for economic data, including GDP numbers for the first quarter and April’s consumer sentiment data, which will provide insight into whether inflation is cooling down and whether the Federal Reserve will announce another rate hike in early May.
The economic data is expected to be mixed, causing continued uncertainty and volatility. We believe that the results over the next seven to ten days will be a significant factor in what the Fed will do next.
Coca-Cola and Credit Suisse reported earnings before the bell on Monday, while Whirlpool and First Republic Bank will announce their results after the trading session. The market is anticipating the results of these reports, along with the Dallas Fed’s Manufacturing survey, which will provide insight into the state of factory activity.
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