Big Tech earnings, crucial inflation call — here comes the biggest week of earnings season

Published Sat, Apr 22 202310:22 AM EDTUpdated Sat, Apr 22 202310:40 AM EDT

Stocks stuck to a holding pattern this week as investors brace for an incoming wave of Big Tech earnings and the Fed's favorite inflation reading. Earnings reports have generally been better than expected so far this first quarter. Full-year estimates for the S & P 500 have largely held at around the $220 level set coming into April. Next week's announcements will surely test those numbers, along with the bulls riding the Nasdaq's 15% gain this year. It also happens to be the biggest week for our portfolio. How important is next week for the market? Consider this: The combined 2023 earnings estimates for Amazon (AMZN), Meta Platforms (META), Alphabet (GOOGL) and Microsoft (MSFT) — all reporting next week, and all core Club names — represent just over 12% of that $220 estimate. Market strategists are going to be watching the tech numbers closely for indications of whether the current that $220 earnings number is too high, too low or just right. That's the question all investors will attempt to answer by Friday. These four powerful mega-caps will also provide valuable insight into several areas of the economy, with commentary from management teams alone able to sway investor sentiment. Amazon, for example, is only expected to generate earnings of $1.49 per share for this entire year. But its e-commerce platform provides significant clues to the state of the consumer, while its AWS cloud unit provides equally important check on business spending, two extremely material indicators of economic growth. On top of earnings, the March report on personal spending and income is out on Friday. This report includes the Federal Reserve's favorite inflation gauge: the personal consumption expenditures (PCE) price index. The Fed likes this reading because it looks at changes in consumer behavior, including whether buyers are substituting goods based on prices. The Street is trying to determine the likelihood of the central bank pulling off a soft landing for the economy — or if it's hiking us into a recession. Here are all the Club names reporting this coming week: Halliburton (HAL) and Danaher (DHR) report before the bell Tuesday; Alphabet and Microsoft report after the bell Tuesday. Humana (HUM) reports before the bell Wednesday; Meta Platforms and Pioneer Natural Resources (PXD) report after the bell Wednesday. Linde (LIN), Honeywell (HON), Eli Lilly (LLY) and Caterpillar (CAT) report before the bell Thursday; Amazon reports after the bell 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 Jobless Claims 8:30 a.m. ET: Gross Domestic Price index 10:00 a.m. ET: Pending Home Sales 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 Spending & Income (includes PCE Price Index) Club trades this week Just one trade: We added 150 shares of Coterra Energy (CTRA) on Wednesday. Jim Cramer's Charitable Trust, the holdings we use as the Club portfolio, owns 1,150 shares of CTRA, increasing its weight to 1.1% from 0.95%. The big oil and nat gas producer is favoring stock repurchases as part of its recent changes to its capital-return priorities; so we wanted to buy alongside it. Looking back First-quarter earnings season for Club holdings continued to be strong, with Johnson & Johnson (JNJ), Morgan Stanley (MS) and Procter & Gamble (PG) all reporting solid results. This past week, there were a few economic reports signaling some softening, as you might expect, with the Federal Reserve tightening monetary policy so rapidly to fight inflation. The market is putting roughly 90% odds on another quarter-point interest rate hike at the central bank's May meeting, according to the CME's FedWatch tool. Tuesday brought J & J earnings before the bell. Given J & J's strong Q1 results and rosy full-year outlook, we were surprised to see the stock sell-off so harshly that day. The reason behind Tuesday's decline was management's projection for pharmaceutical sales in 2025 closer to $57 billion than the annual $60 billion forecasted two years ago. There's so much else to like in this report, and some investors bid up the stock later in the week. Also on Tuesday, March housing starts and building permits missed expectations. Morgan Stanley reported better-than-expected first-quarter results on Wednesday, even as the stock came under early pressure due to rising expenses. But the results, including solid non-interest income, were impressive in a challenging economic environment. By day's end the stock closed higher and was relatively flat for the rest of the week. It was another report showing that major banks have so far weathered the recent mini-crisis hitting regionals. On Thursday, initial jobless claims rose by 5,000 to 245,000 for last week. While still low compared to Covid highs, those seeking unemployment benefits have been trending higher since recent lows just above 180,000 back in September. Perhaps a sign that the Fed's rate hikes are cooling the labor market off a bit. The Philadelphia Fed manufacturing index was also soft, falling more than expected, to its lowest level since May 2020. P & G delivered Friday morning a quarterly earnings beat and forward guidance raise. The consumer goods giant repeatedly raised prices during the quarter, helping boost its gross margin by 150 basis points on an annual basis. As of Friday's settle, the U.S. dollar index is trading at just under the 102 level. Gold is trading at just under $2,000 per ounce. WTI crude prices stand at around $78 per barrel, dropping 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, turning in its best weekly gain since March and climbing for a second straight week. The yield on the 10-year Treasury was 3.57%. Bond yields, which move inversely to prices, have been creeping up in recent weeks since bottoming for the year in early April. (See here for a full list of the stocks. Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will 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 has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

People walk by the New York Stock Exchange (NYSE) on February 14, 2023 in New York City.

Spencer Platt | Getty Images News | Getty Images

Stocks stuck to a holding pattern this week as investors brace for an incoming wave of Big Tech earnings and the Fed's favorite inflation reading.

Earnings reports have generally been better than expected so far this first quarter. Full-year estimates for the S&P 500 have largely held at around the $220 level set coming into April. Next week's announcements will surely test those numbers, along with the bulls riding the Nasdaq's 15% gain this year. It also happens to be the biggest week for our portfolio.