Microsoft and Apple report earnings this week
Major companies including Microsoft, Meta, Apple, and Amazon are set to report earnings this week. The market has been down recently, despite solid results from Alphabet, due to high capex guidance of $200 billion and negative free cash flow.
The earnings season has been excellent so far, with a growth rate of 23% and a strong beat rate. However, the market has been punishing any imperfections, and the stakes are high with a Fed decision and core PCE data expected this week.
The oil price, currently above $90, is also a concern, and the question remains whether $100 Brent will crack producer discipline. The market is walking on eggshells, and any negative news could have a significant impact.
The S&P is still up 8.3% on the year, but the mood has shifted, and the era of applauding AI spending for its own sake is over.