As the earnings season continues, markets are eagerly awaiting the upcoming results of big techs, US first-quarter Gross Domestic Product (GDP) and Personal Consumption Expenditure (PCE).
US stocks fell at the beginning of a week that is set to be jam-packed with business earnings reports and economic data that could affect the Federal Reserve’s (Fed) rate decisions.
This week, starting on Tuesday, several companies are expected to publish results, including Alphabet, Inc., Microsoft Corporation, Amazon.com, Inc., and Meta Platforms, Inc.
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Treasury yields decreased on Monday, while the Dollar held steady despite losing ground to the Euro, which hit a record high last week.
Investors are also anticipating economic data, including the US first-quarter GDP and a key inflation figure later this week.
Since banks started the season last week, releasing mainly stronger-than-expected results, corporate earnings have remained stable. Investors are on the lookout for indications of a slowdown in the economy that may affect profit margins. Analysts are marginally less pessimistic now than they were before the earnings season began, anticipating a 4.7% decline in first-quarter earnings for the S&P 500 group.
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Yesterday, Coca-Cola stocks increased 0.3% following news that demand for its soft drinks was solid despite price increases. This is positive evidence that strong inflation has no impact on demand.
With its next interest rate meeting in early May approaching, the Fed will closely monitor earnings trends as well as this week's economic data. The futures market continues to predict a 25-bps increase, but this could alter based on the statistics that will be made public this week.
The most important economic statistics will be the US GDP for the first quarter and PCE. The latter will especially be significant if it reveals a reduction in the inflation figures favored by the Fed.
Sources: Bloomberg, Reuters