Apple and Amazon Earnings Preview: Can AMZN and AAPL stock rescue the market?
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UNLOCK OFFER- Apple (AAPL) stock next up on the earnings docket, after the close on Thursday.
- Facebook Meta (FB) stock rallied 20% on mediocre earnings, a relief rally.
- Amazon (AMZN) is also set to release earnings after the close on Thursday.
Earnings season really is getting into the meaty stuff this week. We already mentioned this was a make-or-break week and so it is proving. 170 out of the S&P 500 companies are reporting this week. But more importantly, it is mega-cap or mega-tech weak on the earnings front. In the short term – and by that I mean quarterly – stock market performance is largely dictated by earnings performance.
Read more stock market research
There have been various studies on this to prove the point so I won't bore you with citing them. The long-term direction is largely determined by global macroeconomic factors as these will naturally affect company earnings but there is a lag. So if we can get through this week in decent shape then a bear market rally could unfold for the next month. I say bear market because I feel the macro fundamentals will eventually outweigh positive earnings. Deutsche Bank recently move to pencil in a US recession by 2023 and the stock market is generally forward pricing by about 6 months. So that should give us a tough second half of 2022.
Apple stock news: AAPL earnings preview
After the close Apple is expected to hit $93.9 billion in revenue and earnings per share (EPS) of $1.43. More importantly, though will be the conference call. We know about the widely publicized lockdowns in Beijing and Shanghai. Foxconn, an Apple supplier, has been hit with factory closures and investors will want to know how this will affect Apple going forward. This quarter's earnings may not be affected but it may be a big headwind for the next quarter.
Apple stock forecast: AAPL downtrend stays below $179.65
Apple (AAPL) stock has been outperforming other tech names but remains in a modest downtrend formation. A series of lower lows is the key here. So $150 is the key support and $171 the first, but weaker resistance. $179.65 is the real test.
Apple (AAPL) stock chart ,daily
Amazon stock news: AMZN earnings preview
Amazon is also out after the close with earnings. Earnings per share (EPS) is expected to reach $8.07 on revenue of $116.3 billion. We do have some positive read-across from Microsoft (MSFT) earnings earlier this week. Microsoft's Azure is the number one in cloud services but Amazon Web Services (AWS) does occupy the second position in the cloud services sector. Microsoft Azure posted very strong gains and helped MSFT to a solid beat on the top and bottom lines.
The sector it appears is still growing and should benefit AWS. However, Amazon faces consumer headwinds with demand being impacted by inflation and problems with shipping and logistics well known. So it's all to play for here.
Amazon stock forecast: Buybacks to support AMZN
Amazon (AMZN) stock is pretty much at must-hold levels at $2,700 otherwise look out below. What we should also look out for are more massive buyback announcements from Amazon and Apple. Corporate buybacks are helping support the equity market, especially as the Fed pulls the plug on its own printing press. Corporate buybacks are at record levels.
Amazon (AMZN) stock chart, daily
The author is long Facebook
- Apple (AAPL) stock next up on the earnings docket, after the close on Thursday.
- Facebook Meta (FB) stock rallied 20% on mediocre earnings, a relief rally.
- Amazon (AMZN) is also set to release earnings after the close on Thursday.
Earnings season really is getting into the meaty stuff this week. We already mentioned this was a make-or-break week and so it is proving. 170 out of the S&P 500 companies are reporting this week. But more importantly, it is mega-cap or mega-tech weak on the earnings front. In the short term – and by that I mean quarterly – stock market performance is largely dictated by earnings performance.
Read more stock market research
There have been various studies on this to prove the point so I won't bore you with citing them. The long-term direction is largely determined by global macroeconomic factors as these will naturally affect company earnings but there is a lag. So if we can get through this week in decent shape then a bear market rally could unfold for the next month. I say bear market because I feel the macro fundamentals will eventually outweigh positive earnings. Deutsche Bank recently move to pencil in a US recession by 2023 and the stock market is generally forward pricing by about 6 months. So that should give us a tough second half of 2022.
Apple stock news: AAPL earnings preview
After the close Apple is expected to hit $93.9 billion in revenue and earnings per share (EPS) of $1.43. More importantly, though will be the conference call. We know about the widely publicized lockdowns in Beijing and Shanghai. Foxconn, an Apple supplier, has been hit with factory closures and investors will want to know how this will affect Apple going forward. This quarter's earnings may not be affected but it may be a big headwind for the next quarter.
Apple stock forecast: AAPL downtrend stays below $179.65
Apple (AAPL) stock has been outperforming other tech names but remains in a modest downtrend formation. A series of lower lows is the key here. So $150 is the key support and $171 the first, but weaker resistance. $179.65 is the real test.
Apple (AAPL) stock chart ,daily
Amazon stock news: AMZN earnings preview
Amazon is also out after the close with earnings. Earnings per share (EPS) is expected to reach $8.07 on revenue of $116.3 billion. We do have some positive read-across from Microsoft (MSFT) earnings earlier this week. Microsoft's Azure is the number one in cloud services but Amazon Web Services (AWS) does occupy the second position in the cloud services sector. Microsoft Azure posted very strong gains and helped MSFT to a solid beat on the top and bottom lines.
The sector it appears is still growing and should benefit AWS. However, Amazon faces consumer headwinds with demand being impacted by inflation and problems with shipping and logistics well known. So it's all to play for here.
Amazon stock forecast: Buybacks to support AMZN
Amazon (AMZN) stock is pretty much at must-hold levels at $2,700 otherwise look out below. What we should also look out for are more massive buyback announcements from Amazon and Apple. Corporate buybacks are helping support the equity market, especially as the Fed pulls the plug on its own printing press. Corporate buybacks are at record levels.
Amazon (AMZN) stock chart, daily
The author is long Facebook
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