Sharechat Logo

World Week Ahead: Focus on US earnings, retail sales, Fed speakers

Monday 16th April 2018

Text too small?

Investors are gearing up for the latest earnings from US companies including Goldman Sachs and Bank of America as well as a host of speeches by Federal Reserve officials and fresh reports on retail sales and industrial production.

Morgan Stanley, Netflix, CSX, Johnson & Johnson, General Electric and Honeywell are also among US companies set to report their latest quarterly results this week. 

"We expect this earnings season to be another strong one, driven by solid global economic growth, robust manufacturing activity, a weaker US dollar, and the benefits from the new tax law," LPL Financial Chief Investment Strategist John Lynch said in a note on Friday. 

For the group of FAANG stocks —Facebook,, Apple, Netflix and Google’s parent Alphabet, analysts expect average first-quarter year-over-year earnings growth of 25.8 percent, about double the pace of gains in the fourth quarter and the same period a year ago, according to Reuters.

“We feel good about three out of the five FAANGs—Amazon, Apple, Google,” Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, told Reuters. His firm owns Facebook, Amazon, Apple and Google shares.

On Friday, the Dow Jones Industrial Average fell 0.5 percent, the Standard & Poor’s 500 Index slid 0.3 percent, and the Nasdaq Composite Index declined 0.5 percent. US Treasuries rose, sending yields on the 10-year note two basis points lower to 2.82 percent.

For the week, however, the Dow climbed 1.8 percent, the S&P 500 rallied 2 percent, and the Nasdaq jumped 2.8 percent.

The latest US economic data scheduled for release include retail sales, Empire State manufacturing survey, business inventories, and housing market index, due today; housing starts, and industrial production, due Tuesday; Fed's Beige Book, due Wednesday; as well as weekly jobless claims, Philadelphia Fed business outlook survey, and leading indicators, due Thursday.

"Undoubtedly, the Trump tax cuts are boosting companies’ bottom lines, Ed Yardeni, president at Yardeni Research, said in a note on Thursday. "But the overall strength in the economy shouldn’t be underappreciated." 

"Assuming a trade war will be averted, as we do, the good times are expected to continue for the remaining quarters of 2018," according to Yardeni.

Indeed, investors will eye this week’s speeches by a slew of Federal Reserve officials for signals they might step up their pace of interest interest increases from their current guidance for another two this year on expectations of positive economic momentum.

Fed policy makers set to speak include Raphael Bostic today, John Williams, Randal Quarles, Patrick Harker and Charles Evans on Tuesday, Willam Dudley on Wednesday, as well as Loretta Mester on Thursday. 

Investors will also keep eye on the spring meetings of the International Monetary Fund and the World Bank, starting in Washington today, in particular for insight on the potential for a global shift to more protectionist trade policy triggered by the Trump Administration.

In Europe, the Stoxx 600 Index ended Friday with a 0.1 percent gain from the previous day’s close.

Other economic data of note include inflation reports from the eurozone, Germany, and the UK as well as the latest gross domestic product, industrial output and retail sales numbers from China and trade data from Japan.



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZ shares fall as investor uncertainty weighs on exporters; F&P Health, A2 drop
NZ dollar drops below US68c on plan to up bank capital
Noel Leeming fined $200,000 for misleading consumers
Big four banks face stiffer capital requirements from RBNZ
Infratil signals A$50m investment in Canberra Data Centres
Govt provides $2.5 mln to develop Opotiki aquaculture
Labour co-ordinator role may alleviate kiwifruit labour shortage
NZ manufacturing activity chugs along in November
Australia's GWA lobs in $118M bid for Methven
Govt leaves door open for higher emissions price cap

IRG See IRG research reports