Big Week for the Stock Market: Tech Earnings and Economic Data Ahead
This week, investors have a lot to watch with important reports about jobs, inflation, and how fast the economy is growing. At the same time, big technology companies are sharing their earnings for the first part of the year.
Economic Challenges and Tech Giants' Earnings
People are worried that the economy might start to slow down. This concern comes as new tariffs introduced by President Donald Trump start to take effect. Although these tariffs won't show up in the data right away, traders are looking for any signs that the economy might be getting weaker.
There's also talk about "stagflation," a situation where prices go up but the economy doesn't grow much. This makes the upcoming reports on GDP (Gross Domestic Product) and personal spending very important. They will help people understand what might happen next in the economy.
The big technology companies, sometimes called the "Magnificent Seven," are especially important this week. Four of these companies are sharing their earnings. According to Deutsche Bank analysts, these reports will have a big impact on the stock market this week because they make up 40% of the S&P 500's value.
Key Economic Data to Watch
Here’s what’s expected this week:
- Consumer Sentiment: This measures how people feel about the economy. Lately, people have been feeling more negative, which could mean they'll spend less money. This is important because if people spend less, it can hurt businesses.
- Jobs Data: On Friday, we'll get a report from the Bureau of Labor Statistics about how many jobs were added in April. Experts think there were 124,000 new jobs, down from 228,000 in March. This report helps us understand if businesses are hiring more people or starting to cut back.
- Economic Growth: We'll also see how fast the economy grew in the first part of the year. Experts think it grew very little, only 0.2%, compared to 2.4% at the end of last year. The Atlanta Fed is even more pessimistic, expecting a shrinkage of 2.5%.
- Inflation: The report on inflation will show how much prices have gone up. This is important for understanding how the tariffs might be affecting prices. If inflation is higher than expected, it could make people more worried about stagflation.
What to Expect from Tech Earnings
Several big tech companies are reporting their earnings:
- Meta (Facebook’s parent company): They report on Wednesday. Experts think they made $41.3 billion and had earnings of $5.23 per share. They are also spending a lot on artificial intelligence, which could affect their future earnings.
- Microsoft: They're expected to show strong results thanks to high demand for their cloud services and artificial intelligence.
- Amazon: They report on Thursday. While their current results look good, the future is less certain because of the new tariffs.
- Apple: They wrap up the tech earnings. It's known that iPhone sales were strong as people bought them before the tariffs came into effect. Investors will be looking for information on how tariffs, regulations, and other issues might affect Apple.
This week is packed with crucial information that will help investors understand where the economy and stock market might be heading. Everyone will be watching closely to see how these reports turn out.