The US earnings reporting season peaks this week with upwards of 200 S&P 500 companies reporting and dominating will be some of the companies underwriting Wall Street’s current strength – Facebook, Alphabet (Google) and Amazon.
A flock of energy giants are also due to report, along with a couple of early reporters among media stocks in the US and UK, while a couple of consumer facing giants are also down to report which will tell us a bit about how spending is tracking.
Alphabet (Google) is down to report its second quarter figures tomorrow morning (Sydney time) after US stockmarkets close, Facebook is due to report early Thursday morning, our time and Amazon is down to report on Friday night, our time. Games giant, Electronics Arts is due to release its report later in the week as well.
Netflix reported last week and surprised on the upside while the biggie – Apple reports on August 1. Tesla, another hot techie is due to report on August 2.
By the time these companies have reported the strength of the current record run on Wall Street will be confirmed or open to question. Facebook has already revealed it cracked 2 billion global users in the June quarter.
Energy (oil and gas prices) remain a big imponderable for investors. Oil prices have risen and fallen this year and the quarterly results over the next two weeks will confirm that, but investors will be looking for statement on the outlook, and more cost cuts in coming months.
Shell, Statoil (from Norway), ConocoPhillips and Total (France) kick off the Q2 earnings reports on Thursday, followed by Exxon, and Chevron on Friday. BP reports on August 1.
Several leading mining stocks will also report – Newmont Mining and Freeport MacMoran, while early reports among media groups (remembering Netflix has already surprised on the upside) include the John Malone linked companies, Charter Communications, Sirius (the satellite radio company) and ITV, the big UK commercial broadcaster which is expected to reveal a weak first half result.
America’s two biggest telcos, AT&T and Verizon are due to report and investors will be looking for an update on AT&T’s Time Warner deal and if there is any news on rumoured merger plans at Verizon (Disney has been mentioned).
A number of big pharma companies also on the reporting list – Bristol Myers, Glaxo Smithkline, Elli Lilly and AstraZeneca.
Big manufacturing companies including Texas Instruments, Intel, AMD, 3M, Boeing, General Dynamics, GM, Caterpillar, Ford, Honeywell, Dow Chemicals and Dupont are due to release their quarterly figures this week.
After General Electrics’ weak outlook in Friday’s quarterly report investors are steeling themselves for a repeat from some of these companies – especially GM and Ford where US car sales are slowly sliding and intense price discounting has broken out.
These companies will not only give us a timely update on the strength of US manufacturing, but also test the health of the country’s major manufacturers which should now be getting a boost from the sliding US dollar now at its lowest level for two years against the euro and a year generally against all major currencies.
Coca Cola, Starbucks, Mattel, Hasbro (both toymakers), McDonald’s and Whole Foods (Amazon’s $US13.7 billion target) are on the list of consumer facing companies to report – they should also get positives from the weaker dollar.
So far almost 19% of S&P 500 companies have reported and 73% of those have posted better-than-expected earnings, an improvement to the 5-year average, according to the FactSet data group.
FactSet also says that S&P 500 companies are currently expected to report earnings growth of 7.2% in the second quarter, and revenue growth of 5%, according to the data provider’s latest calculations.
Outside of reports, investors will also keep an eye on Tesla, which has previously said it would release its long-awaited mass market Model 3 electric vehicle, with a starting price of $US35,000, on Friday.
