On Wednesday, the Fed will announce its next policy statement at 1:00 pm CT (2:00 pm ET) followed by Jay Powell's press conference at 1:30 pm CT (2:30 pm ET). On the back of a more hawkish stance from the FOMC board, Fed Funds are pricing in a greater likelihood of higher rates towards the back half of 2022. After 850,000 new jobs were created in June, markets will pay close attention to the Fed's mandate of maximum employment -- how fast can we get there? The Fed's inflation expectations were revised from 2.2% to 3% for 2021 and comments on the stickiness of inflation will provide clues on the taper chatter. Whether tapering is already happening with the Fed's Reverse Repo window near $1tln/day is another question; Jay Powell said in June that the facility "is doing what it is supposed to do."
Quarterly GDP numbers are set to be released at 7:30 am CT (8:30 am ET) on Thursday. The market is looking for QoQ GDP at 8.3% after 6.4% in Q1. JP Morgan trimmed its own Q2 forecast to 8% from 9% while BofA revised its annual estimate to 6.5% from 7.0%. Downside risks include the COVID Delta variant, supply chain shortages, port bottlenecks, as well as a slow labor market that's holding back businesses from ramping up as quickly as they would like. Economic data will be interpreted through the Fed's lens and may or may not give credence to some of Powell's statements a day prior.
All eyes will be on big-cap tech earnings.
Consensus: EPS est. of $0.96; Rev. est. of $11.22bn
Comments on China regulation anticipated: China's vehicle safety authority announced Tesla is recalling more than 285,000 vehicles over autopilot safety concerns.
Vehicle delivery numbers, operating cash flow, and net income watched closely
Comments on Tesla Gigafactories in Berlin, Texas, and Shanghai will be on the radar
Consensus: EPS est. of $1.00; Rev. est. of $72.93bn
Investors will focus on work-from-home trends in the Mac section
Any signs for the future direction of iPhone sales will be watched closely (iPhone 12 and iPhone 12 Pro numbers in the mix)
Comments about Apple's ATT (app tracking transparency) update in iOS will be looked at with an eye on Facebook, Twitter, SNAP, and Pinterest
Consensus: EPS est. of $1.90; Rev. est. of $44.10bn
Microsoft Azure numbers will be watched closely as revenues increased 50% during the prior quarter. Azure vs. AWS cloud service dynamics (Amazon reporting after the bell on Thursday)
Consensus: EPS est. of $19.89; Rev. est. of $56.02bn
Search, YouTube and cloud computing are amongst the most closely watched
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