FOMC Meeting And Highly-Anticipated Earnings Are In Focus This Week

April 26, 2021 08:00 AM
The Fed is purchasing $120 billion in assets per month
This week, we look to earnings from the 6 largest companies by market cap in the U.S.
The Federal Reserve’s policy decision is announced Wednesday
Stock Market Update for Traders

Stock Market Update for Traders

Last Week's Close

E-mini S&P 500 Futures (June): Settled at 4171.50, up 43.75 on Friday and down 4.75 on the week

E-mini Nasdaq-100 Futures (June): Settled at 13,927, up 176.75 on Friday and down 102.50 on the week

U.S. benchmarks finished last week strongly and are clinging to those gains at the onset of a new one. In a jam-packed week ahead, we look to the Federal Reserve’s policy decision Wednesday and earnings from the 6 largest companies by market cap in the U.S. 

The Fed is purchasing $120 billion in assets per month; $80 billion in Treasuries and $40 billion in mortgage-backed securities. Given the economic rebound and recent job gains, a Bloomberg poll of 49 economists showed 59% of them expecting the Fed to begin tapering those purchases in the Q4 or sooner. Fed Chair Powell has been steadfast in the notion of patience in removing the Fed’s unprecedented accommodations, but he did signal the economy has begun to turn a corner. 

Listen, the data right here, right now, has certainly displayed a strong rebound, but the taper discussion can’t take hold until we see a continuation of those job gains from March. The inflation data will matter less, we have already realized everyday inflation and know inflation from last year’s base numbers will show up in the coming months, but the Fed believes it’s transitory. What matters now is the stage the Fed sets this week heading into April’s jobs report next week. Will markets participants interpret willingness from the Fed to taper before the first half of 2022?

Tesla releases earnings after the close today. The company is expected to report EPS of 79 cents and revenue of $10.4 billion, up sharply from 1 year ago, but down slightly from last year’s Q4. Regulatory credits will be a major factor and investors are eager for an outlook amid growing competition. Microsoft and Alphabet report tomorrow, Apple and Facebook Wednesday, and Amazon reports Thursday. This is the heart of earnings season and, just tomorrow, names like Visa, Starbucks, UPS, and many more also report.

On the economic calendar, Durable Goods came due at 7:30 a.m. CT. The Treasury will auction $60 billion in 2-Year Notes and $61 billion in 5-Year Notes today at noon CT, before tomorrow’s dreaded 7-Year auction. Treasury prices are trading lower in anticipation ahead of the bell. German Ifo Business Climate fell shy of expectations earlier this morning, and tonight both China’s Industrial Profit is due, and the Bank of Japan releases a policy decision.

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