More than 130 companies on the S&P 500 are due to report this week as the June 30 quarterly season starts slowing – but one of those will be the most important of them all for market confidence – Apple.
Apple was valued at $US779 billion at the close on Friday, Alphabet (google) ended on $US657 billion and Facebook was a smidge away from half a trillion with a value of $US499.8 billion, having moved past Amazon ($US487 billion) whose shares lost 2.5% on Friday after the weak quarterly report on Thursday.
The world’s largest company by market value reports results after US markets close on Tuesday (early Wednesday morning).
Analysts on Wall Street are looking for earnings of $US1.57 a share, on revenue of $US44.9 billion.
Investors will be watching to see if iPhone unit sales climbed in the company’s third quarter after they dipped 1% in the March quarter to 50.8 million units.
After Amazon’s 77% slide in earnings for the quarter, a weak report from Apple could knock market confidence in the big tech group (the so-called FANG stocks) and force Wall Street lower.
Amazon is forecasting a stepped up rate of investment, which investors have accepted.
Apple will be joined by companies including Pfizer, Time Warner, Archer Daniel Midland, Under Amour, Bunge, Fitbit, Hannesbrands (which owns Pacific Brands in Australia), Genworth, Time Warner, Gannett, Flour, Molson Coors, Mondelez, Tesla, Dish Network, Marathon Oil, Devon Energy, Chesapeake, Kellogg, Motorola, Kraft Heinz and Warren Buffett’s Berkshire Hathaway.
While Exxon’s results missed forecasts, spending was much lower than expected (even though it is spending billions on a huge new field near Guyana, while Chevron bounced back into profit from a year ago which impressed investors.
All the oil majors last week( Shell, Total and ENI are now confident they can exist with global oil prices around the current $US50 to $US45 a barrel level for US and Brent crudes.
Companies listed on the S&P 500 are expected to post year-on-year earnings growth of 9.1% and revenue growth of 5.2%.
Of the 57% of the S&P 500 that have posted results already, 73% posted better-than-expected earnings estimates, above the index’s five-year average, according to FactSet, the US data group.
Nearly 300 S&P 500 companies to have reported so far and of those about 77% have beaten earnings expectations and 74% have beaten on revenue.
Earnings could be up 12% year on year by the end of the reporting season.