(Originally published on Prudential.com)
Over one hundred S&P 500 companies will deliver earnings reports this week, including technology giants Apple, Amazon, Alphabet (Google), Facebook, Microsoft, Qualcomm and eBay, Prudential's Chief Market Strategist Quincy Krosby said Jan. 29 in her weekly "Connecting the Dots" outlook.
Bellwether names McDonald's, Boeing, AT&T, Time Warner, Mastercard, Visa and UPS will also be reporting this week, Krosby noted.
"We're looking for the revenue story, how much they are making on the top line," Krosby said.
"Revenue was up for 80 percent of the companies already reporting. That's very good because revenue gives you a picture of demand, and this gives us a positive view of where the economy is going."
The Federal Open Market Committee (FOMC) meets this week as Chair Janet Yellen presides over her last Fed meeting. Market expectations are that the Fed leaves rates unchanged, but possibly sets the stage in the statement that the first rate hike in 2018 may be forthcoming, Krosby said.
"The market right now believes there will be no rate hike," Krosby said. "The question is, will the statement have a more hawkish tilt to it."
President Donald Trump's State of the Union Address could affect the market if he announces new initiatives, she said.
"We will see whether the president talks about infrastructure," Krosby said. "The big question is how we will we pay for that."
With a clutch of data releases this week, economists are solidly focused on Friday's employment. Consensus estimates are for 180,000 new jobs created, with the unemployment rate remaining at 4.1 percent, Krosby said. Analysts — and the Treasury market — will focus on average hourly earnings which have been slowly inching higher.
Lastly, Super Bowl 30-second ads are netting $5 million, just slightly lower than last year's $5.02 million.
This week's data releases:
- Monday: Personal income and outlays
- Tuesday: The FOMC begins its meeting; consumer confidence; Case-Shiller home price index
- Wednesday: ADP employment report; pending home sales; FOMC meeting announcement
- Thursday: Motor vehicle sales; PMI manufacturing index; ISM manufacturing index; construction spending
- Friday: Employment Report; factory orders
Read Quincy Krosby's full Q1 Market Commentary: Turning the Page.