Published - July 31st, 2023 @ 11:00 AM (GMT+2)
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Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN), two of the world's most powerful corporations, are set to dominate headlines as they usher in the new trading month with their eagerly anticipated quarterly earnings reports. As the third quarter enters its second month, market enthusiasts and financial analysts will closely monitor the companies' performance.

Apple's and Amazon's Earnings
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Apple (AAPL), which recently breached $3 trillion in market cap and is trading near an all-time high, is capturing the attention of investors worldwide. The stock has soared nearly 50% this year, leading to its earnings report. Goldman Sachs analyst Michael Ng's preview on July 25 reaffirmed the positive outlook for Apple, highlighting the growing iPhone installed base as a foundation for increased monetization per user.
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Amazon (AMZN) is another behemoth that investors will be eyeing, primarily focusing on its Amazon Web Services (AWS) unit. With Microsoft's Azure revenue cooling down, there is anticipation and curiosity around whether Amazon's cloud leader will re-accelerate its growth. In the wake of Azure's deceleration in 3Q, UBS analyst Lloyd Walmsley expressed slight caution for AWS in a note on July 26.

Market Highlights and July Jobs Report
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These focal reports on Apple and Amazon are set to be released in a week filled with important updates, including the July jobs report scheduled for Friday morning.  According to Bloomberg’s Data, the US economy is expected to add 200,000 nonfarm payroll jobs, while the unemployment rate remains unchanged at a historically low 3.6%.

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Nasdaq, S&P 500 & Dow Jones Performance Overview
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On the earnings front, results from other major companies like AMD (AMD), Starbucks (SBUX), Pfizer (PFE), and Uber (UBER) will also be on the radar. The Nasdaq Composite (^IXIC) is up nearly 37% for the year, partly due to Apple and Amazon's strong performance. Meanwhile, the S&P 500 (^GSPC) is up 19%, and the Dow Jones Industrial Average (^DJI) has gained nearly 7%.
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With an unexpected acceleration of economic growth in Q2 and cooling inflation, stocks continue to rise. The Federal Reserve's decision to raise interest rates to their highest level since 2001 has also influenced the market trend.

Economists and financial experts are increasingly confident that the projected 2023 recession might not occur. This optimism is also spurred by the possibility of a "soft landing" to the Fed's hiking cycle, where inflation stabilizes without causing a significant economic downturn.

Q2 Earnings and Decline in Revenues
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In addition to Apple and Amazon's reports, other S&P 500 companies are set to announce their earnings this week. With roughly half of the S&P 500 having reported earnings, the second quarter is midway. As expected, revenues are declining for the third straight quarter by 7.3%, according to FactSet. This would be the most significant decline since Q2 of 2020.
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Despite this decline, 80% of S&P 500 companies still beat Street expectations for earnings per share, above the five-year average of 78%. Revenue expectations are surpassed by 64% of companies, below the five-year average of 69% but above the 10-year average of 63%.

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Conclusion:
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As the financial world turns its focus to Apple and Amazon, traders and investors must keep in mind that the market's recent move higher implicitly raises growth expectations. Earnings season is in full swing, and the performance of these tech giants could set the tone for the broader market's direction.

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The information on mexem.com is for general informational purposes only. It should not be regarded as investment advice. Investing in stocks involves risk. A stock's past performance is not a reliable indicator of its future performance. Always consult a financial advisor or trusted sources before making any investment decision

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