Amazon, Meta, Microsoft and Google Earnings: Here’s What Could Drive Stocks in the Week Ahead

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Corporate earnings will remain in focus next week as investors digest how businesses performed during the first quarter of the year — and how they expect to do moving forward.

“My concern will be how much companies may guide down expectations for the second quarter, especially in the technology and industrial sectors,” says Dave Sekera, chief U.S. market strategist for Morningstar. “We continue to expect that tight monetary policy and tightening credit conditions will slow economic growth to a crawl in the second quarter and lead to a slight contraction in the third quarter.”

There’s also more economic data on tap, and investors will be closely eyeing those numbers for insight into what the Federal Reserve plans to do at its upcoming meeting.

Here’s what investing experts will be watching the week of April 24:

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Big tech earnings

Companies will keep reporting their revenues, sales and other relevant information from the first three months of the year.

So far, it’s been an unexciting start to the season. Many companies are meeting their reduced earnings expectations, which “helps to explain the lack of movement in the major stock indices over the past few days,” Carol Schleif, chief investment officer at BMO Family Office, said in written commentary shared with Money.

Analysts didn’t head into earnings season optimistic. In fact, they’re expecting an earnings recession, which is when earnings fall year over year for two fiscal quarters in a row.

Morningstar’s Sekera says the week ahead will be a “real test for market” as several mega-cap stocks will be reporting earnings. He suspects that, overall, first-quarter earnings will end up looking pretty good compared to expectations, as “most management teams either guided down or provided conservative guidance at the beginning of the year in anticipation of a slower economy.”

Amazon, Meta, Microsoft and Google’s parent company, Alphabet, are just a few of the major companies reporting earnings in the week ahead. Sekera notes that when it comes to Microsoft and Alphabet specifically, he’ll be listening for their strategies regarding artificial intelligence.

As Jeffrey Buchbinder, chief equity strategist for LPL Financial, recently told Money, companies’ forward guidance — as in, comments on how they expect business to do in the coming months — may be even more important than the earnings results themselves.

More economic data

Investors are still closely watching economic data for any insight into what the Federal Reserve’s next move will be.

The Fed has been hiking interest rates for about a year in an attempt to curb high inflation, but those rate hikes have also weighed on the price of financial assets, like stocks. Recent data shows that inflation has cooled, but Wall Street is still split on what it expects next from the Fed, with many saying it’s still too early for the central bank to pause its rate increases.

Liz Ann Sonders, chief investment strategist at Charles Schwab, tells Money the economic data she’ll be watching in the week ahead includes updates on home prices and sales, consumer confidence, personal consumption expenditures (PCE) inflation, and personal income and spending.

Information on home sales and prices can give us a look into the health of the housing market and thus how the economy overall is doing, while consumer confidence measure how consumers feel about the economy — that can help discern how they may spend moving forward. PCE prices show how much people are paying for goods and services; it’s another measure of inflation.

The difference between PCE and and consumer price index (CPI) — another widely-used inflation measure — is that PCE sources the data from businesses, while CPI does so from consumers.

Personal income and spending measures indicate, as you’d expect, the change in value of income received by consumers and the change in spending of consumers. Numbers that come in stronger than expected tend to be supportive of the U.S. dollar, while a weaker reading than forecasted can be negative for the U.S. dollar.

More from Money:

Why Stocks Could Fall Again as Companies Start Reporting Earnings

Why April Could Be a Strong Month for the Stock Market

Are Index Funds Actually Bad for Investors?

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