S&P 500 traders are highly anxious to see apple and amazon earnings

Stock investors are highly anxious to see Amazon and Apple earnings after markets close today.

Earnings

Both companies will offer further insight into consumer demand as well as the wider US tech sector. Apple's stock is already up about +48% so far this year while Amazon is up more than +50%. Apple is of course the largest company in the world with a valuation of more than $3 trillion. The company is also expected to report a third-quarter in a row of declining revenue due partially to declining iPhone sales. Apple does not usually provide a quarterly outlook but investors are still expecting company executives to provide some information about how artificial intelligence (AI) will play a role going forward.

AI is expected to be mentioned by Amazon executives as well but the bigger focus among investors is the company's cloud business. After Amazon and Apple wrap up, NVIDIA will be the only big US tech giant left to report earnings, which is scheduled for August 23, and it will likely be newsworthy.

Last quarter, the company projected $11 billion in revenue for Q2, which was +$4 billion higher than what analysts expected and would mark a growth rate of +64% compared to Q2 2022.

Aside from Amazon and Apple, other earnings today include Airbnb, Amgen, Block, Cigna, Coinbase Global, ConocoPhillips, Corteva, DraftKings, Gilead Sciences, Hyatt Hotels, Kellogg's, Moderna, Rocket Companies, The Southern Company, Stryker, Vulcan Materials, and Warner Bros. Discovery. 

Data to watch

Investors today are also on edge ahead of the July Employment Report due out on Friday. ADP in its private payroll report yesterday showed job gains of +324,000, well above Wall Street estimates. It is also far higher than the +200,000 jobs expected to be reported by the Labor Department on Friday. ADP was way off the mark last month, though, so Friday's report could very well deliver a number more in-line with consensus.

The big worry is that if the labor market remains tight and continues putting upward pressure on wages, the Fed may feel it has no choice but to keep raising interest rates. The ISM Services Index today could provide some better clues as to the true trend of the labor market. The sub-components that track employment and inflation are both expected to contract from June, which would be moving in the right direction as far as the Fed goes. However, some economists worry that if the services sector slows too much, it could tip the economy into recession.

Activity last month came in at 53.9, barely above 50 - the level that marks contraction. The US manufacturing sector has been in contraction since last November.

The market might not be spending much time worrying about Fitch’s downgrade of US government debt, from AAA to AA+. Keep in mind, US Treasuries haven’t been the world’s “safest” since 2009 as German bunds now hold that title. It will be interesting to see if any more cracks start showing up as Fed lets off the rate hiking gas pedal and the effects of higher rates continue to ripple deeper into the economy.