along withappleInvestors will usher in the climax of the US stock market earnings season in the coming week.
In addition to FAAMG (Facebook, Apple, Amazon,Microsoft, Google parent company Alphabet) and several of the largest technology companies, investors will also receive Southwest Airlines, JetBlue and other airlines, General Motors, Ford and other auto companies, as well as energy giants Chevron and Exxon Mobil. financial report.
Nearly a third of S&P 500 companies, or 161 companies, will report earnings in the coming week, according to FactSet. The 12 Dow Jones Industrial Average leaders, including Boeing Co and McDonald’s, are also expected to report.
Earnings data from these companies can give investors a better idea of how companies are doing as inflation weakens consumer spending, ongoing supply chain challenges and a stronger dollar.
U.S. stock market volatility has risen recently
U.S. stocks have moved higher over the past week despite a sharp rise in U.S. bond yields in October. The S&P 500 rose 4.75% in five sessions this week, a rally not seen in U.S. stocks since June 2020.
Sam Stovall, chief market strategist at CFRA, reportedly said:
“Although only three weeks have passed this month, we are 50% more volatile than the average stock market in October. On average, there were 5.4 days of 1% volatility in October, and we’ve had 8 so far this month. God.”
As of Friday, the S&P 500 had risen by 1% or more in six of the past 17 sessions, with five of those up more than 2%, Stovall said. He says:
“A lot of times, volatility during a downturn in the stock market is a signal that a bottom is in place.”
Additionally, strategists have been looking for signs that the market is nearing a bottom, as stocks have historically generally rebounded into the end of the year in a midterm election year.
U.S. Treasury yields reversed some of their rapid gains on Friday. Previously, the media published an article saying that a sharp interest rate hike in advance may mean that this round of interest rate hike cycle will end earlier, suggesting that the Fed may consider raising interest rates slightly in December after raising interest rates by 75 basis points in early November. .
Scott Redler, a partner at T3Live.com, told Reuters he expects Friday’s move in 10-year yields to signal a temporary peak in interest rates, which will help next week’s earnings data.
What will earnings season bring?
Earnings from major companies will serve as a gauge of how consumers react to higher prices and whether they change their spending as a result.
Earnings data from consumer companies like Coca-Cola and Kimberly-Clark on Tuesday and Kraft Heinz on Wednesday will show how consumers are pricing in higher prices during this period. Mattel, which is due to release a report next Tuesday, will focus on whether consumer demand for discretionary items such as toys remains resilient.
Shipping company United Parcel Service is due to report its results next Tuesday, showing how it performed during the previous busy shipping season. Rival FedEx previously warned of a looming global recession and said it would raise shipping rates on most of its services in January to combat a slowdown in global business.
Results next week from credit card companies Visa and Mastercard, which both reported resilience figures last quarter, will show whether inflation is ultimately denting consumer spending.
Wireless carrier T-Mobile US will report earnings next Thursday. Two carriers have released data this week: AT&T said its core wireless business beat company expectations and issued an optimistic outlook on Thursday; while Verizon said on Friday that it was battered by retail customers’ lack of response to the recent price hikes. Consumption momentum, and its earnings plummeted. T-Mobile’s data will provide more insight into the wireless carrier’s mixed results.
Other notable companies to report results next week include Mexican-style restaurant chain Chipotle Mexican Grill, chicken supplier Pilgrim’s Pride Corp. and chip makerIntelcompany.