This week, investors are set to scrutinize earnings reports from several major companies, with Tesla’s (TSLA) Tuesday announcement expected to be a significant highlight.
Other prominent firms reporting include Alphabet (GOOG), Visa (V), Verizon Communications (VZ), IBM (IBM), and AT&T (T). The pharmaceutical sector will also see updates from AbbVie (ABBV), AstraZeneca (AZN), and Bristol Myers Squibb (BMY).
In addition to corporate earnings, the June report on the personal consumption expenditures (PCE) index will be released, providing critical insight into whether inflation continues to decline. This data will be the Federal Reserve’s last update on prices before its late July meeting. Investors will also receive the first estimate of the second-quarter gross domestic product (GDP).
Key Earnings to Watch
Corporate earnings from top tech, telecom, and pharmaceutical companies will be closely monitored, with several high-profile second-quarter reports due this week.
Tesla’s report on Tuesday is highly anticipated, following a better-than-expected quarterly delivery report that has boosted its shares. Tesla is expected to show second-quarter revenue close to what it posted in the same period last year.
Alphabet will also report on Tuesday, aiming to improve on its previous quarter’s 15% revenue increase, which included the announcement of its first dividend for shareholders. IBM and ServiceNow will report on Wednesday.
Major telecom companies are in focus as well, with Verizon Communications set to provide its financial update on Monday. AT&T will report on Wednesday amid ongoing challenges related to a data breach, while Comcast is scheduled for Tuesday.
In the pharmaceutical sector, AbbVie’s earnings are due after the company warned of increasing competition for its popular arthritis drug Humira. AstraZeneca, Bristol Myers Squibb, and Thermo Fisher Scientific will also deliver their quarterly updates.
Visa’s earnings report on Tuesday will offer insight into how consumers are coping with current credit conditions. Investors will also watch for earnings from consumer brands like Coca-Cola, which reports on Tuesday, to gauge whether shoppers are still willing to pay higher prices. Other consumer brands reporting this week include Colgate-Palmolive, 3M, and Unilever.
Economic Data and Fed Outlook
Key inflation data will be released on Friday, with the personal consumption expenditures (PCE) index expected to show whether price growth continued to slow in June. This data is crucial as Federal Reserve officials have indicated a growing confidence that the annual rate of price increases is approaching their 2% target. The Fed has maintained high interest rates to combat inflation spikes from 2022 and 2023, and is looking for more positive news on price levels before considering rate cuts.
Friday’s PCE report is the last major economic data point before the Federal Open Market Committee (FOMC) meets at the end of July. While most investors and economists believe the Fed will wait until September to make a move, some argue that a rate cut could be justified in July if the inflation report is favorable. However, Federal Reserve officials are in a blackout period this week, prohibiting public comments ahead of the next FOMC meeting.
Investors will also receive the first estimate of second-quarter GDP figures on Thursday. A strong June retail sales report has led some economists to anticipate stronger-than-expected GDP data.
Additional economic data this week includes June updates for new and existing home sales, consumer sentiment, retail and wholesale inventories, and the June advance international trade report, which will update the U.S. trade deficit.
