Fed decision and inflation reports will rock markets
What are the expected outcomes and impacts of the upcoming earnings reports from major companies like Oracle, GameStop, Broadcom, and Adobe?
The upcoming earnings reports from major companies like Oracle, GameStop, Broadcom, and Adobe are crucial for investors and analysts as they provide insights into the financial health and performance of these companies. These reports can have a significant impact on the stock prices of the respective companies and the overall market sentiment.
Oracle is expected to report earnings of $1.65 per share, down 1.2% year-over-year (YoY). Revenue is forecast to arrive at $14.6 billion (+5.4% YoY). Mizuho Americas analyst Siti Panigrahi believes these estimates appear conservative and that Oracle could exceed them thanks to momentum in its Oracle Cloud Infrastructure (OCI) division2.
GameStop has not provided any specific earnings estimates, but the company's recent release of earnings early and the announcement of another stock offering could affect its stock price.
Broadcom's earnings are expected to grow by 32.03% in the coming year, from $36.06 to $47.61 per share. Broadcom has confirmed that its next quarterly earnings report will be published on Wednesday, June 12th, 2024. Broadcom will be holding an earnings conference call on Wednesday, June 12th at 5:00 PM Eastern3.
Adobe is anticipated to report earnings of $4.40 per share (+12.5% YoY) on revenue of $5.3 billion (+10.4% YoY). Industry analysts believe that AI demand will be a key focal point in Adobe's fiscal second-quarter results.
The impact of these earnings reports on the market will depend on how well the companies perform compared to analysts' expectations. Positive surprises could lead to a boost in stock prices and overall market sentiment, while disappointing results may have the opposite effect.
What are the key reasons Wall Street and the real estate sector are hoping for lower interest rates?
Wall Street and the real estate sector are hoping for lower interest rates for a few key reasons:
- Easier and cheaper borrowing: Lower interest rates make it less expensive for individuals and businesses to borrow money5. This encourages spending and investment, which can boost economic growth.
- Stimulating the housing market: Lower interest rates can stimulate the housing market by making mortgages more affordable. This can lead to an increase in home sales and construction activity, which in turn can boost the broader economy.
- Boosting stock prices: Lower interest rates can also boost stock prices. When interest rates are low, investors are more likely to invest in stocks because they can earn a higher return than they would from bonds or other fixed-income investments.
- Supporting the commercial real estate market: Lower interest rates can also support the commercial real estate market by making it cheaper for developers and investors to finance new projects6. This can lead to an increase in commercial real estate activity, which can further stimulate economic growth.
In summary, lower interest rates can provide a significant boost to both the residential and commercial real estate sectors, as well as the broader economy. This is why Wall Street and the real estate sector are often hopeful for lower interest rates.
How did the May jobs report impact the expectations of a Federal Reserve rate cut?
The May jobs report impacted the expectations of a Federal Reserve rate cut by reducing the probability of a rate cut in July4. The report showed a better-than-expected increase in job growth, with employers adding 272,000 jobs compared to the expected 190,000 jobs. This strong job growth and consistent wage increase, along with falling inflation, led some experts to believe that the Federal Reserve may hold off on cutting interest rates. The decision on rates will be influenced by upcoming inflation data and other economic reports, but the strong jobs report makes it less likely for the Fed to cut rates soon.