In the world of finance, two significant events are set to unfold this week: the Federal Reserve's policy meeting and the earnings reports from several major tech companies. Let's delve deeper into these developments.
The Federal Reserve is scheduled to hold a two-day policy meeting starting on Tuesday, with an announcement expected on Wednesday. The central bank has been closely watched for any indications of potential rate cuts in the near future. According to CME Group's FedWatch tool, there is a 73% probability of a September rate cut.
Meanwhile, four tech giants - Apple, Amazon, Meta Platforms (Facebook), and Microsoft - are set to release their latest quarterly earnings reports later this week. These companies are collectively known as the 'Magnificent Seven' due to their significant impact on the market. The earnings from these tech titans could dictate market sentiment in the coming days.
Investors have been keeping a close eye on stock futures, with S&P 500 futures, Dow Jones Industrial Average futures, and Nasdaq 100 futures all experiencing slight dips ahead of Tuesday's open. However, it is important to note that these movements do not necessarily indicate the direction of the broader market once regular trading begins.
One notable development in extended trading involved CrowdStrike shares falling more than 5% after Delta Air Lines hired attorney David Boies to seek damages from CrowdStrike and Microsoft following an outage that led to thousands of flight cancellations, costing Delta an estimated $350 million to $500 million.
As the week progresses, investors will be closely monitoring earnings reports from other companies such as Merck, Pfizer, PayPal, Procter & Gamble (P&G), JetBlue Airways, Microsoft Corporation (MSFT), and Advanced Micro Devices (AMD). Analysts are relatively comfortable with their estimates for these companies' earnings beat rates.
In the broader economic landscape, the Federal Reserve's policy meeting and the upcoming official employment report will provide valuable insights into the state of the economy. Savita Subramanian, Bank of America's head of U.S. equity and quantitative strategy, noted that both 2024 and 2025 consensus EPS for S&P 500 companies are expected to grow at a robust rate.
Stay tuned for more updates as these events unfold.
