S&P 500 Price Outlook:
S&P 500 Forecast: Tech Earnings Unleashed Ahead of Fed Rate Decision
The S&P 500 closed Tuesday trade near record levels, fluctuating around highs set in Monday’s session. While earnings from Tesla on Monday left something to be desired among some investors, the results were acceptable enough to keep risk appetite intact ahead of the string of earnings unleashed this afternoon. With a mixed bag of results thus far, the S&P 500, Nasdaq 100 and Dow Jones will shift their focus to the April FOMC meeting and upcoming earnings from the rest of the big tech members for direction in the latter half of the week.
S&P 500 Earnings Breakdown
Source: Bloomberg, Margaret Yang
In the meantime, traders and investors will be left to decipher the reports from Google, AMD, Starbucks, Microsoft and others that were offered Tuesday after the close.Google’s quarter was perhaps the most impressive of the bunch, exceeding expectations on both the top and bottom lines. It also announced a staggering $50 billion buyback program. Unsurprisingly, investors were thrilled with the quarter as shares immediately jumped more than 5%.
Not to be outdone, AMD offered impressive results of its own, enjoying a beat on the top and bottom lines. AMD shares crept 3% higher in the immediate aftermath.
Microsoft was more of a mixed bag as revenue barely beat expectations alongside a slight EPS beat. Like Tesla before it, stocks at the top of the high-flying Nasdaq 100 often require significant quarterly outperformances to see a positive reaction given their extended valuations and considerable future growth forecasts.
With earnings spread across the board but broadly positive, upbeat sentiment will likely continue into Wednesday trade as investors prepare for the Fed’s April rate decision at which no change to the interest rate range is expected, but discussion around inflation is hotly anticipated. Many corporate leaders have begun to express concern regarding inflationary pressures, a theme sure to receive coverage in the post-FOMC press conference. As earnings season continues, follow @PeterHanksFX on Twitter for updates and analysis.
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–Written by Peter Hanks, Strategist for DailyFX.com
Contact and follow Peter on Twitter @PeterHanksFX