Noreen Burke

Investing.com — Investors will be eyeing a deluge of earnings in the coming week, including reports from tech titans Apple, Microsoft, Amazon and Google parent Alphabet amid hopes that solid corporate earnings will bolster U.S. equity markets, which have been rocked by the Federal Reserve’s hawkish pivot. The Eurozone and the U.S. will soon release preliminary data regarding first quarter growth, as well as closely-guarded inflation readings. Here’s what you need to know to start your week.

1. Earnings from big tech

The indices are worth about half the benchmark’s value. In the next week, nearly 180 companies will be reporting results. This includes the largest four U.S. corporations by market capitalization, Apple (NASDAQ;), Microsoft(NASDAQ:), Amazon and Google parent Alphabet.

The stock market has fallen by 9% so far in 2018, down 13% and 17% respectively, while the 18% have dropped.

Expectations for the first quarter are low. A selloff of Netflix shares (NASDAQ:) after Netflix reported falling subscribers has raised concerns about future tech earnings.

“Expectations are low, but that doesn’t mean it’s not important,” James Ragan, director of wealth management research at D.A. Davidson spoke to Reuters. “If we are going to hit that 9% (earnings growth) for the year or even better than that, it’s hard to imagine we are going to do that without having better-than-expected earnings from the megacap companies.”

Other big news reports during this week include the owner of Facebook, Meta Platforms and payment companies Visa (NYSE) as well as Mastercard (NYSE) oil majors Chevron (NYSE: Exxon Mobil (NYSE:), as well as consumer companies Coca-Cola’s (NYSE:). Pepsico (NASDAQ:).

2. U.S. Economic Data

This week’s focus will be on earnings. However, there are concerns about whether or not the Fed is able to engineer an economic soft landing as it aggressively fights soaring inflation.

On Thursday, the U.S. will release preliminary data about its first quarter growth. It is expected that the pace of growth in this quarter will slow to 1.1% from 6.9% during the last quarter 2021 due to the Omicron Wave of the pandemic.

The GDP data will be followed a day later by the , believed to the Fed’s preferred gauge of inflation.

Fed Chair Jerome Powell last week said that an increase of half-point in interest rates “will be on offer” when the central banking meets May 3-4. Powell also stated that investors who expected a series or half-point increases were responding appropriately to the Fed’s rising fight against inflation.

The comments appeared to confirm an expected rate path much steeper than projected at the Fed’s last meeting in March.

You can also find updates in the economic calendar on,?,?,??, and.

3. Stock market volatility

Wall Street’s three main benchmarks ended in negative territory for the week on Friday, in what was the third straight week of losses for both the S&P 500 and the , while the posted its fourth weekly decline in a row.

Friday’s 2.82% drop in the Dow was its since October 2020.

Recent trading swings that are exaggerated have been more frequent, both as traders adapt to earnings data and because of concerns about the Fed’s aggressive rate increases.

Wall Street’s fear gauge the, also called The on Friday, rose to its highest level since March mid-March.

Craig Erlam of OANDA, senior market analyst, said that it is rare for the market to move 2% either way in the time I have been doing this job.

It’s unusual, but it’s how things are for so long.

4. Eurozone data

The Eurozone is to publish data on first quarter on Friday along with preliminary data on consumer price inflation for April, which is expected to come in at , almost four times higher than the European Central Bank’s 2% target.

Christine Lagarde (ECB President) stated that last week the bank would likely stop its bond purchasing scheme early in third quarter, and increase rates before year end to fight rising inflation.

However, the conflict in Ukraine has clouded the picture for the ECB. The pandemic caused high energy costs and disruptions of supply chains and exacerbated growth by war-related effects on the economy have resulted in higher prices and increased volatility.

5. European earnings

European earnings will begin in earnest this week. While companies should have adapted to higher inflation during the first quarter of 2018, investors will be focused on the outlook for the remainder of the year.

More than 140 companies will report their results this week, which includes consumer goods giants. Unilever PLC (LON:), Nivea maker Beiersdorf (ETR:), along with UBS Group’s leading banks (SIX) Deutsche Bank (ETR:), HSBC LON: Barclays (LON:).

Kasper Elmgreen of Amundi’s equities department expects the first quarter to be “okay”, but is focusing on uncertainty and price pressures resulting from Ukraine.

Elmgreen said to Reuters, “It is super, super, SUPER important that we understand the capabilities of the companies in passing on the costs increases onto consumers.”

“What will they say about pricing?” What will they say about volume? How about the mix margins? Can they speak to the outlook for demand? He concluded.

This report was contributed by Reuters