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Stocks have been stuck this week as investors brace for another wave of Big Tech earnings and the Fed’s favorite inflation reading. Earnings reports have generally been better than expected so far in the first quarter. Full-year estimates for the S&P 500 have largely held around the $220 level set in April. Next week’s announcements will surely test those numbers, as well as the bulls on the Nasdaq’s 15% gain this year. It also happens to be the most important week for our portfolio. How important is next week for the market? Consider this: The combined 2023 revenue estimates for Amazon (AMZN), Meta Platforms (META), Alphabet (GOOGL) and Microsoft (MSFT) – all reporting next week and all major club names – add up to a bit more 12% of that $220 estimate. Market strategists will be watching the tech numbers closely to see if the current earnings figure of $220 is too high, too low, or fair. This is the question that all investors will try to answer by Friday. These four powerful mega-caps will also provide valuable information on several areas of the economy, with the comments of the management teams alone capable of influencing investor sentiment. Amazon, for example, is only expected to generate $1.49 per share for the full year. But its e-commerce platform provides meaningful clues about consumer status, while its AWS cloud unit provides equally important control over business spending, two hugely important indicators of economic growth. In addition to income, the March report on personal expenses and income is released on Friday. This report includes the Federal Reserve’s preferred inflation indicator: the Personal Consumption Expenditure (PCE) price index. The Fed likes this reading because it looks at changes in consumer behavior, including whether buyers are substituting goods based on price. The Street tries to determine the likelihood that the central bank will pull off a soft landing for the economy – or if it will drag us into a recession. Here are all the names of the clubs reporting this week: Halliburton (HAL) and Danaher (DHR) report before the bell on Tuesday; Alphabet and Microsoft report after the bell on Tuesday. Humana (HUM) Reports Before The Bell Wednesday; Report from Meta Platforms and Pioneer Natural Resources (PXD) after the bell on Wednesday. Linde (LIN), Honeywell (HON), Eli Lilly (LLY) and Caterpillar (CAT) report before the bell on Thursday; Amazon reports after the bell on Thursday. Here are some other earnings reports and all the economic numbers to watch in the week ahead: Monday, April 24 Before the bell: Coca-Cola (KO), Royal Philips (PHG) After the bell: Cleveland-Cliffs (CLF), First Republic (FRC), Whirlpool (WHR) Tuesday, April 25 Before the bell: 3M (MMM), Biogen (BIIB), Dow Chemical (DOW), GE HealthCare (GEHC), General Electric (GE), General Motors (GM) , JetBlue (JBLU), Kimberly-Clark (KMB), McDonald’s (MCD), PepsiCo (PEP), PulteGroup (PHM), Raytheon Technologies (RTX), Sherwin Williams (SHW), Spotify (SPOT), United Parcel Services (UPS) ), Verizon (VZ) After the bell: Chipotle (CMG), Illumina (ILMN), Texas Instruments (TXN), Visa (V) 10 a.m. ET: New Home Sales Wednesday, April 26 Before the bell: Norfolk Southern (NSC) , Boeing (BA), Boston Scientific (BSX), Entergy (ETR), Fortive (FTV), General Dynamics (GD), Hilton Worldwide (HLT), Owens Corning (OC), Penske Auto (PAG), Ryder Systems (R ), Thermo Fisher (TMO) After the bell: Canadian Pacific (CP), eBay (EBAY), Edward Lifesciences (EW), ServiceNow (NOW), United Rentals (URI) Thursday, April 27 Before the bell: Comcast (CMCSA), Crocs (CROX), Domino’s Pizza (DPZ), AbbVie (ABBV), American Airlines (AAL), AstraZeneca (AZN), Bristol-Myers (BMY), Harley-Davidson (HOG), Hasbro (HAS), Hershey (HSY) , Hertz (HTZ), International Paper (IP), Keurig Dr. Pepper (KDP), Mastercard (MA), Merck (MRK), Northrop Grumman (NOC), Rockwell Automation (ROK), Sanofi (SNY), SiriusXM (SIRI ), Southwest (LUV), Tractor Supply (TSCO), Valero Energy (VLO) After the Bell: Amgen (AMGN), Boston Beer (SAM), Capital One (COF), Activision (ATVI), Intel (INTC), L3Harris (LHX), Mondelez (MDLZ), Skechers (SKX), Snap (SNAP), T-Mobile (TMUS), US Steel (X) 8:30 a.m. ET: Weekly Initial Unemployment Claims 8:30 a.m. ET: Gross Domestic Index price 10:00 a.m. ET: Home sales pending Friday, April 28 Before the bell: AON (AON), Bloomin’ Brands (BLMN), Charter Communications (CHTR), Chevron (CVX), Colgate-Palmolive (CL), Exxon (XOM), LyondellBasell (LYB), Newell Brands (NWL) 8:30 a.m. ET: Personal expenses and income (includes PCE price index) Club trades this week Single trade: We added 150 shares of Coterra Energy (CTRA ) Wednesday . Jim Cramer’s Charitable Trust, the holdings we use as the Club’s portfolio, owns 1,150 shares of CTRA, increasing its weighting from 0.95% to 1.1%. Major oil and natural gas producer favors share buybacks amid recent changes to its capital return priorities; so we wanted to buy next door. Review The first quarter earnings season for the Club’s holdings remained strong, with Johnson & Johnson (JNJ), Morgan Stanley (MS) and Procter & Gamble (PG) all posting strong results. Last week, a few economic reports signaled some easing, as one would expect, with the Federal Reserve tightening monetary policy so quickly to fight inflation. According to the CME’s FedWatch tool, the market is pricing in another quarter-point interest rate hike at the May central bank meeting to around 90%. Tuesday brought J&J earnings before the bell. Given J&J’s strong first quarter results and positive full-year outlook, we were surprised to see stocks selling so hard that day. The reason for Tuesday’s decline was the direction’s projection of pharmaceutical sales in 2025 closer to $57 billion than the annual $60 billion projected two years ago. There’s so much more to like about this report, and some investors pushed the stock higher later in the week. Also on Tuesday, housing starts and building permits in March missed expectations. Morgan Stanley reported better-than-expected first-quarter results on Wednesday, even as the stock came under early pressure from higher spending. But the results, including strong non-interest income, have been impressive in a difficult economic environment. At the end of the day, the stock closed higher and remained relatively stable for the rest of the week. This was another report showing that the big banks have so far weathered the recent mini-crisis that hit the regionals. On Thursday, initial jobless claims rose by 5,000 to 245,000 for the past week. Although still weak from Covid highs, those applying for unemployment benefits have been trending higher since recent lows just above 180,000 in September. Perhaps a sign that the Fed rate hikes are cooling the labor market a bit. The Philadelphia Fed’s manufacturing index was also weak, falling more than expected, to its lowest level since May 2020. P&G posted a quarterly earnings beat and an increase in forecasts on Friday morning. The consumer goods giant raised prices several times during the quarter, helping to boost its gross margin by 150 basis points on an annual basis. Since Friday’s settlement, the US Dollar Index has been trading just below the 102 level. Gold is trading at just under $2,000 an ounce. WTI crude prices sit around $78 a barrel, down for the week and breaking a four-week winning streak. Natural gas, on the other hand, is trading at around $2.22 per million British thermal units, posting its best weekly gain since March and climbing for a second straight week. The 10-year Treasury yield was 3.57%. Bond yields, which move inversely to prices, have climbed in recent weeks since year-to-date lows in early April. (See here for a full list of stocks. Jim Cramer’s Charitable Trust.) As a CNBC Investing Club subscriber with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY DUTY EXISTS, OR IS CREATED BY YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
People walk past the New York Stock Exchange (NYSE) on February 14, 2023 in New York City.
Spencer Platt | Getty Images News | Getty Images
Stocks have been stuck this week as investors brace for another wave of Big Tech earnings and the Fed’s favorite inflation reading.
Earnings reports have generally been better than expected so far in the first quarter. Estimates for the full year S&P500 largely held around the $220 level set in April. Next week’s announcements will surely test those numbers, as well as the bulls on the Nasdaq’s 15% gain this year. It also happens to be the most important week for our portfolio.