Investors across the United States are gearing up for one of the busiest weeks on the earnings calendar, with major tech titans like Alphabet, Microsoft, and Meta set to report their quarterly results. Other significant U.S. companies such as Verizon, Visa, Tesla, and Amazon among others, are also on deck, promising a week full of insights into corporate America’s health amid varying economic signals.
This earnings season comes at a time when the U.S. economy shows signs of a slowdown, with GDP growth expected to decelerate to 2.1% in Q1 from a 3.4% rate in Q4. Inflation measures, both core and headline PCE, are anticipated to rise by 0.3% in March, mirroring the previous month’s figures. Additionally, personal income is likely to have grown by a faster rate of 0.5%, while personal spending growth is expected to have slowed to 0.3% from 0.8% a month earlier. This complex backdrop makes the forthcoming corporate earnings even more pivotal for market sentiment.
Attention will also be directed towards other important U.S. economic indicators including durable goods orders, the S&P Global PMI survey, home sales data, the Chicago Fed National Activity Index, and advance estimates of wholesale sales and the goods trade balance. Moreover, the final reading of the Michigan consumer sentiment will provide further clues about the mood of the American consumer.
On the international front, Europe is set for a busy week with the release of the latest S&P flash figures for key economies including the Eurozone, Germany, France, and the UK. Germany’s business climate and consumer confidence data will be particularly in focus, along with Euro Area’s flash consumer sentiment and official 2023 figures on government debt and budget. In the UK, updates on business optimism, industrial trends, and public sector borrowing will offer additional cues on the economic environment.
In the monetary policy arena, the People’s Bank of China is expected to keep its one and five-year loan prime rates steady, aiming to maintain stable financial conditions and defend the yuan amidst recent pressures. Similarly, the Bank of Japan is anticipated to hold its interest rate steady following its recent hike, with investors keenly awaiting any signals on future policy directions.
Further afield, economic updates from Asia are due, with Japan releasing PMI figures and Tokyo’s inflation rate for April. India will also publish its April PMI data. South Korea is set to advance its first quarter GDP figures, while Bank Indonesia will decide on its new policy rate. Inflation updates from Malaysia and Singapore are also on the agenda, alongside Australia’s first-quarter inflation rate and April PMI data.
As global markets navigate through these myriad data points and corporate earnings, investors will be closely monitoring the implications for market trajectories in what promises to be a week full of crucial economic insights and potential volatility.