Early on, it will be interesting to see if the big Tech names that make up a large chunk of the market move in one direction and pull the broader market with them, or if they offset each other.
GOOGL and MSFT headed different pre-market directions despite both posting better than expected earnings.
If you read the headlines, you might have thought Azure sales were “flat.” They were anything but, rising 50%, which was above the 46% analysts had projected.
Cloud revenue was a little below expectations, which could disappoint investors hoping GOOGL can make a “dark horse” run against the thoroughbreds already far ahead on the track.
Everyone was uncertain what the ad environment would look like, and the assumption was that if GOOGL had solid growth, FB might, too.
It’s hard to remember the last time a Fed meeting was the third-most important thing going on in a week.
Instead, eyes could be on today’s earnings from Apple , either.
In its fiscal Q1, it surpassed analysts’ estimates in almost every key category, whether it was iPhone sales, services, iPads, Macs, or wearables.
Going into AAPL earnings, consider keeping an eye on Services revenues—the category that includes cloud storage and backup, digital content and payment services.
Mac and iPad sales, too, might be a couple to keep tabs on, as many analysts have pointed out how the pandemic seemed to infuse new life into the lowly personal computer.
Its advertising prices were up 30% over 2020 levels as of mid-March, according to research from marketing agency Aisle Rocket.
As investors digest the latest from Powell, Apple CEO Tim Cook, and Facebook CEO Mark Zuckerberg, the government will post its first estimate tomorrow morning for Q1 GDP.
Getting back to the Fed, barring some kind of big surprise , we’re likely to hear more of the same stuff from Powell and company.
Minutes from the March Fed meeting, you might recall, explained that the Fed would only change the current policy once outcomes in the economy are actually achieved, not just because they’re projected to be achieved.
Also at the March meeting, the Federal Open Market Committee raised its outlook for economic growth and inflation.
The breakeven rate has now crossed above 2.38%, the highest this year and an indication that maybe investors are taking the Fed’s word that the Fed won’t pump the brakes via policy anytime soon.
So the question going into today’s press conference is whether Powell indicates that the recent earnings and data have the Fed starting to think at all about tapering at some point.
Sometimes a weaker dollar can help companies with big markets overseas, making their products more affordable.
Revenue Eyed Over EPS: In general, earnings continue to look solid, but there’s a bit of a bifurcation developing between earnings and revenue.
Remember, the bottom-line number isn’t really a very organic read on a company’s quarter, considering all the ways this can be massaged by the reporting firm or be knocked around from quarter to quarter by one-time events.
“We expect to be able to manage inflation with price and our actions on supply chain improvements,” and the company is maintaining its earnings per share guidance for the year, he added.
It wouldn’t be surprising at all to hear Fed Chairman Jerome Powell get asked about this in his press conference later today, but he’s been saying to expect transient inflation as the economy “snaps back,” to use CEO Roman’s words.
It recently hit a nearly two-month low, but got a little bounce yesterday that might have reflected short-covering ahead of the Fed meeting.