Jan 29. Week Ahead: Fed Decision, Tech Earnings & Economic Data

January 2024 may be nearing its end, but the month’s economic events and releases are far from over. From the interest rate decisions of the Fed and BoE to big tech earnings, Gross Domestic Product (GDP), and more, here are the main market events for this week:

Tech Earnings: AMD, Microsoft, Alphabet

After a less-than-optimistic earnings report from the peer EV and tech giant Tesla (TSLA), traders and investors may be eagerly awaiting the upcoming tech earnings releases to gauge the overall outlook for the tech industry.

On Tuesday, January 30, tech giants, AMD, Microsoft, and Alphabet are all scheduled to report their earnings after the ring of the bell. 

AMD (AMD) is expected to report a YoY earnings rise and revenues for Q4 2023. According to the Zacks Consensus Estimate, the chip giant’s Earnings Per Share (EPS) is likely to reach $0.77. If this prediction materializes, it would mark a YoY increase of 11.6%. Additionally, AMD’s revenues are expected to rise by 9.2% from Q4 2022, landing at $6.11 billion.

Microsoft (MSFT), which recently joined Apple to become the second company in history to reach a market capitalization of $3 trillion, is expected to report positive earnings growth for Q2 FY2024. The company is expected to report a net income of $20.6 billion, exceeding the prior year’s quarter figure of $17.4 billion. Furthermore, the company's total revenue is expected to increase by 16% YoY, reaching $61 billion. If these predictions come to fruition, it would mark the company’s highest revenue growth in about two years.

Similarly, Alphabet (GOOG) is projected to report positive earnings on Tuesday when it announces its Q4 2023 results. The main focus is expected to be on the company’s Cloud segment, especially after weaker-than-expected cloud revenue in Q3 of 2023. This time around, analysts expect a positive turnaround for the company’s Google Cloud segment

Additionally, for Q4 2023, analysts expect Alphabet’s revenue to reach $85.24 billion, exceeding the year-ago quarter’s figure of $76.05 billion. As for diluted EPS, the company is expected to report $1.61, also surpassing Q3’s $1.55 and Q4 2022’s $1.05.  (Source: Investopedia)

In addition to Tuesday’s releases, both traders and investors may want to keep track of Qualcomm’s (QCOM) and Amazon’s (AMZN) earnings reports on Wednesday, January 31, and Friday, February 2, respectively, to gain more insights into the tech sector as we head into a new month.

The Federal Reserve’s & BoE’s First Meetings of the Year 

The Federal Reserve’s FOMC committee is set to meet for the first time this year on Tuesday and Wednesday, January 30-31. 

The Fed’s meetings are among the most important and closely-watched gatherings of the year, as they have a direct impact on the monetary policy of the world’s largest economy, influencing both the general economy and financial markets in particular.

After a generally hawkish 2023, during which the Fed raised rates to tackle persistent inflation, this time around, the Fed is expected to maintain rates unchanged at 5.25%-5.50%, as it did in its last meeting of 2023, with the possibility of rate cuts throughout the year. It appears that the Fed aims to further assess the effects of rates on inflation. 

In addition to the Fed, traders and consumers may want to track the upcoming Bank of England (BoE) decision on Thursday, February 1. Similar to the Fed, the BoE is also expected to maintain bank rates at 5.25%. However, unlike the Fed, England’s Central Bank is not expected to cut rates anytime soon, as inflation remains persistent in the UK for now.

More Economic Data: CPI, GDP, PMI, NFPs 

The week is filled with economic releases worldwide. Australia’s Q4 Consumer Price Index (CPI), along with Germany's and Canada's GDP, is expected to be released on Wednesday, January 31. In addition, Eurozone inflation and unemployment rates, as well as the US Purchasing Managers Index (PMI), are set to be released on Thursday, February 1. Finally, on Friday, February 2, the focus will shift to the release of US Non-Farm Payrolls (NFPs) and unemployment rates.

Conclusion

This week is certainly eventful and can provide valuable insight into the state of the global economy and the markets as we head into a new month. Only time will tell what the data will reveal.