A broad spectrum of earnings releases this week. From the world's largest chipmaker and AI big hitter Taiwan Semiconductor Manufacturing to Dow Jones index giants Procter & Gamble, Johnson & Johnson and American Express.
CPI figures from New Zealand and the UK will also be of keen interest as the market anticipates interest rate cuts by major central banks. “Higher for longer” still dominates the global narrative. How long will central banks hold out on a 2% inflation target?
Here are the week’s key events:
The week kicks off with Goldman Sachs earnings and retail sales figures out of the States being accompanied by the Empire State Manufacturing Index. Goldman Sachs is a compelling earnings-beat candidate this quarter according to Zach's Equity Research — although “Wall Street expects a year-over-year decline in earnings on higher revenues”.
The U.S. consumer has remained robust, although last month's retail sales grew slightly less than forecasted – retail sales were up 0.6%, with core retail sales up 0.3%. Will the US auto industry stay as strong even as gasoline prices hit their highest level in six months?
Earnings: Goldman Sachs
Tuesday is a big day for U.S. equity markets as big swingers Johnson & Johnson, Morgan Stanley, Bank of America and UnitedHealth Group all release earnings. Johnson & Johnson recently bought medical device maker Shockwave for $13.1bn, the company said that the move would “accelerate its shift into higher-growth markets” but traders shouldn't expect that reflected in earnings just yet.
UnitedHealth’s earnings are expected to grow, a beat would be a nice recovery from cyberattack disruptions and a 15% valuation fall this year. The day closes out with inflation figures out of New Zealand overnight at 11:45 pm BST; will CPI sit well with the decision to hold rates by the central bank last week?
Earnings: Bank of America Corp., Johnson & Johnson, Morgan Stanley, UnitedHealth Group
A break for major earnings releases and a slowdown on the data front Wednesday will largely be focused on CPI figures from the UK. UK inflation is gradually decreasing towards the 2% target, with the Annual Consumer Price Index (CPI) dropping from 4% in January to 3.4% in February, and Core CPI (excluding volatile items like energy and food) declining to 4.5% from 5.1%.
Goods inflation slowed to 1.1%, and services inflation moderated to 6.1%. These reductions signal a hopeful trend towards the target, primarily influenced by an 18-month decrease in energy prices and a recent dip in food prices. Nonetheless, underlying domestic pressures remain, notably in the service sector, driven by wage growth exceeding core inflation, suggesting persistent inflationary risks.
Earnings season continues to dominate the calendar after a brief midweek hiatus with Blackstone, Netflix and Taiwan Semiconductor Manufacturing (TSMC) reporting on Thursday. The world's largest chipmaker remains a key player in the AI space race as President Biden convinces TSMC to build cutting-edge facilities on US soil in exchange for billions in subsidies.
Goldman Sachs recently raised the Netflix price target from $565 to $600 as revenue is expected to re-accelerate. Elsewhere, the market will also be focusing on unemployment figures from both Australia and the US.
Earnings: Blackstone, Taiwan Semiconductor Manufacturing, Intuitive Surgical, Netflix
The week finishes up with earnings from American Express and Procter & Gamble, as well as UK retail sales figures. Analysts surveyed by Bloomberg project that American Express is expected to announce adjusted earnings of $2.01 per share, alongside revenues estimated at $11.36 billion.
Procter & Gamble stock unperformed against competitors last week as it recalled 8.2 million defective detergent packets, can strong earnings bring investors back onside? Finally, UK retail sales are expected to continue to pick up as inflationary pressure eases.
Earnings: American Express, Procter & Gamble
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