S&P 500 Members Pfizer, Mastercard, Proctor & Gamble, and Exxon Mobile also reporting
US stocks start Monday coming off last week’s solid performance, only to face a series of key earnings reports, several significant economic releases and a US Federal Reserve decision on a key interest rate.
The S&P 500’s earnings reports to date, according to FactSet, are weaker than average. The research firm notes that index constituents posting positive surprises and their magnitude are below the five year average in 2022.
Q2 2022 hedge fund letters, conferences and more
"However," the research noted, "the index has a higher earnings growth rate for the second quarter today relative to the end of the quarter mainly due to continued upward revisions to EPS estimates for companies in the Energy sector. On a year-over-year basis, the S&P 500 is reporting its lowest earnings growth since Q4 2020. The lower earnings growth rate for Q2 2022 relative to recent quarters can be attributed to a difficult comparison to unusually high earnings growth in Q2 2021 and continuing macroeconomic headwinds."
Just over 100 firms in the S&P have reported so far. Among those, 68% reported positive surprises, below the 77% five-year average.
The Federal Reserve Open Market Committee's meeting begins Tuesday, with a rate decision released at 2 p.m. on Wednesday. They'll set a key interest rate, and The Wall Street Journal said at the end of last week that the Fed's leaning toward another 75-basis-point hike at Tuesday's two-day meeting rather than the 100-basis-point increase some Fed watchers had predicted.
The federal government also reports second-quarter GDP this week, and many analysts expect to see a second consecutive quarterly slowdown. The economy contracted by 1.6% in the first quarter, and two quarters in a row of slowing growth is one indicator of a recession, but not the only one.
The Atlanta Fed's live market sentiment gauge calls for another 1.6% contraction.
Top Tech Stocks Will Report This Week
The market's top tech stocks will report this week, with investors as interested in the future guidance as the past results.
Meta Platforms Inc (NASDAQ:META), whose shares are off about 45% year to date, with a $154.25 to $384.33 trading range, reports results. The company reports on Wednesday.
Amazon.com, Inc. (NASDAQ:AMZN) reports earnings on Thursday. Its shares are off 25% this year and more than 30% from a year ago.
Google parent Alphabet Inc (NASDAQ:GOOG) will disclose its second quarter performance on Tuesday. It traded between $102.21 to $152.10 a share this year.
Microsoft Corporation (NASDAQ:MSFT) hasn't escaped the tech carnage as its shares slid more than 20 since the new year. The stock's traded in a $241.51 to $349.67 52 week range. Look for Microsoft earnings on Tuesday.
Saving the biggest for last, Apple Inc (NASDAQ:AAPL) shares are down a more modest 13% in 2022, are up a modest six percent compared to a year ago. Apple will report fiscal third quarter earnings on Thursday.
Other major S&P 500 companies reporting this week include Pfizer Inc. (NYSE:PFE), Mastercard Inc (NYSE:MA), Procter & Gamble Co (NYSE:PG), Exxon Mobil Corp (NYSE:XOM) and Visa Inc (NYSE:V).
Also noteworthy this week, NXP Semiconductors posts results on Monday, marking the first prominent chipmaker to open its books for investors. Investors remain wary of the high-profile supply chain issues and related shortages and expect lackluster results.
Deutsche Banc analyst Ross Seymote recently wrote, "The ongoing 'purgatory' stage of the semiconductor cycle continues to be in full effect as we head into the second quarter earnings season.
Article by Greg Morcroft, Fintel
