What will drive the markets this week?
Rising inflation and concerns that the US Federal Reserve will increase interest rates drove global equities lower last week, despite mixed earnings from big banks.
Markets will largely be driven by earnings reports this week – major companies notably technology firms that form part of the FAAMG group - Meta, Apple, Amazon, Microsoft, and Google will report this week. Tech stocks have had a challenging time since 2022, and most have retreated from their 2021 highs.
The tech-heavy Nasdaq has fallen about 18% year-to-date, almost double the decline in the overall market. Growth stocks, which include many large tech companies, tend to be negatively affected when interest rates rise due to higher borrowing costs compared to value stocks – stocks of more established companies. Many established (value stock) companies including Coca Cola, Boeing, Colgate-Palmolive, and others also report earnings.
Investors will also review economic data including preliminary reading for first quarter GDP growth and housing in the US. GDP in the US is forecasted to experience a slow growth – about 1.5% quarter-on-quarter rate, or 4.3% year-over-year compared to 6.9% rate of increase in the fourth quarter of 2021. Here is a quick summary of events that will drive markets this week.
Monday, April 25
- Earnings from Coca Cola, Activision Blizzard, and Whirlpool
Tuesday, April 26
- Earnings from Microsoft, Alphabet, Visa, Pepsi Co., Novartis, UPS, Texas Instruments, Raytheon, HSBC, Amgen, BP, General Electric, Starbucks, 3M, General Motors, UBS, Capital One, WarnerMedia Discovery, and Chipotle.
- U.S. Case-Shiller Home Price Index (February)
- U.S. Durable Goods New Orders (March)
- Conference Board Consumer Confidence Index (April)
- U.S. New Home Sales (March)
Wednesday, April 27
- Earnings from Meta, T-Mobile, Qualcomm, PayPal, American Tower, Sony, Boeing, ADP, CME Group, Canadian Pacific Railway, Ford, Banco Santander, Humana, Kraft Heinz, O’Reilly Automotive, Aflac, Hess, Deutsche Bank, Spotify, and IQVIA.
- U.S. Pending Home Sales (March)
Thursday, April 28
- Earnings from Apple, Amazon, Mastercard, Eli Lilly, Comcast, Merck, Intel, McDonald’s, Linde, Sanofi, Caterpillar, Stryker, Gilead, Northrop Grumman, Keurig Dr. Pepper, Hershey, Southwest Airlines, and Credit Suisse.
- U.S. Real GDP Growth - Preliminary Estimate (Q1 2022)
- Germany Consumer Price Index (April)
Friday, April 29
- Earnings from Exxon Mobil, Chevron, AbbVie, AstraZeneca, Bristol-Myers Squibb, Honeywell, Charter Communications, Aon, Colgate-Palmolive, Phillips 66, and Barclays.
- U.S. PCE Price Index (March)
- Michigan Consumer Sentiment Index - Final (April)
- Germany Real GDP - Final (Q4 2021)