Written by Norman Isaac Mwambazi

What to know this week: FOMC meeting, Big Tech earnings

There is going to be a plethora of potentially market-moving events this week for investors to contemplate this week, with …

There is going to be a plethora of potentially market-moving events this week for investors to contemplate this week, with corporate earnings season ramping up – specifically big tech – and a Federal Reserve monetary policy decision on deck.

For starters, the Federal Open Market Committee (FOMC) will hold its April meeting on Tuesday 27th and Wednesday 28th, with Federal Reserve Chair Jerome Powell set to hold a monetary policy decision and press conference on Wednesday afternoon.

With the Fed having already signalled that it would keep benchmark interest rates on near-zero through at least 2023, market participants do not expect major changes to the policy to be announced at the conclusion of this April FOMC meeting on Wednesday.

Powell has suggested that the Fed’s first action once it begins making policy changes will be to modify the central bank’s crisis-era asset purchase program, which is currently taking place at a rate of $120 billion per month.

In past press conferences and public remarks, however, Fed officials have signalled they had not even started thinking about adjusting these quantitative easing policies because there is still uncertainty around the COVID-19 pandemic.

However, data collected on the level and pace of economic recovery has significantly built a case for easing support. A case in point is the fact that initial jobless claims dropped to a pandemic-era low last week, and retail sales rose nearly 10%, the highest since May 2020. According to IHS Markit, manufacturing and service sector purchasing managers’ indices also rose to the highest level in the survey’s history. This attributed to the rise in consumer demand for goods and services as the economy opened up at the beginning of the year and continues to do so.   

Michelle Meyer, the Chief Economist at Bank of America wrote in a note thus:

“At the conclusion of the April FOMC meeting, we expect Chair Powell and the FOMC to give a more positive view of the economy but reiterate that the economy needs to make further progress before signalling any policy change and risks remain from the virus

“The policy statement and the press conference are likely to emphasize that while the Fed is encouraged by the recent data, the recent acceleration in inflation should prove temporary, and the labour market recovery is far from complete.

“On asset purchases, we will look to see if Powell reiterates that it will be ‘some time’ before achieving ‘substantial further progress’ or changes the description of the path. We believe ‘some time’ is still appropriate, but there is a risk that he shifts.”

Other economists and analysts have also suggested that the rapidly strengthening economic environment could similarly prompt a faster than currently planned change in Federal Reserve policy.

This could come both as a response to an economy that is no longer in need of such enormous support from the Fed, and as a means of staving off a potential surge in inflation as demand outpaces supply during the recovery.

James Knightley, the Chief International Economist at ING wrote in a note thus:

“With the economy opening up more and more each day, we are anticipating a series of 1 million-plus monthly payroll gains that could be enough for the Federal Reserve to call ‘substantial further progress’ and start the tapering process before the end of the year.”

Others, however, expect monetary policymakers to continue to demur on talk of tapering for the near term. This is what Chief U.S. macro strategist Jim O’Sullivan said:

“We don’t expect any substantive new signal yet on tapering – or tightening – even as the tone on the economy is more positive than in March. We expect the signalling to evolve over time as the recovery proceeds, and we just changed out the forecast for the start of tapering to March 2022 from September 2022, but we expect officials will be reluctant to say anything that could be construed as a tapering countdown signal until much later this year.”

Big Tech earnings

This week, a significant number of mega-cap tech companies will report Q1 FY2021 earnings results this week. Companies like online retail giant Amazon, Google’s parent company Alphabet, social network giant Facebook and Apple are up against heightened expectations because tech stocks largely benefited from stay-at-home measures during the COVID-19 pandemic.

According to an analysis from Credit Suisse’s Jonathan Golub, companies comprising just over a quarter of the benchmark S&P 500’s market cap reported Q1 FY2021 results Friday, April 23, 2021. 83% of companies reporting results posted earnings that exceeded estimates by a combined of 23.1%.


JPMorgan Chase analyst Doug Anmuth wrote in a note thus:

“Amazon is our favourite FANG name into Q1 [FY2021] earnings. We expect upside to our Q1 revenue estimate of $105 billion on continued strong e-commerce trends (also helped by two rounds of stimulus), with investor expectations for $106 billion+ based on our conversations.

“In terms of positioning, we believe Amazon is less owned than Google and sentiment more in check than in recent quarters given tough comps ahead, which Netflix results may have reinforced.”

According to Bloomberg consensus data, Amazon is expected to post revenue growth of 39% year-over-year for Q1 FY2021, accelerating from its 26% growth rate from the same quarter of 2020.

In February, Amazon suggested that it would incur COVID-19-related costs of about $2 billion in Q1, after incurring more than $5 billion in costs since the start of the pandemic through the end of last year.

Daniel Salmon, a Capital Markets analyst at BMO wrote in a note thus:

“We think Amazon difficult comps owing to the acceleration of e-commerce during the pandemic are well understood, but nevertheless will remain the top focus for the print. With that said, we are more intrigued by the potential change in margin profile as some COVID related expenses could fade as vaccinations rise and restrictions ease. This comes after 2019 when a similar level of investment was put into one-day shipping.”

Facebook and Alphabet

These advertising-driven companies are also reporting against high estimates, given that analysts have already priced in a rebound in advertising revenues during the economic recovery.

Facebook’s expected Q1 FY2021 revenue growth of 34% would be its fastest since early 2018, and Alphabet is expected to report revenue growth of 26% also its fastest pace since early 2013.

“We think Google faces a higher bar this quarter than the past few as expectations for a strong search and brand advertising recovery are anticipated. But our estimates move slightly higher too, as key categories like travel continue to return, and YouTube’s strength in CTV [connected TV] shines through,” Salmon wrote.  


Unlike the three above-mentioned big tech companies that are reporting Q1 FY2021, Apple will be reporting earnings for its second quarter. This will come after a record-setting holiday quarter at the end of last year, with the iPhone 12 upgrade cycle helping fuel results.

The boost from these new devices likely extended into the start of the year, though some pundits suggested ongoing chip shortages could put a damper on results later in the year.

Seasoned analyst Dan Ives wrote in note thus:

“We are expecting the iPhone 12 supercycle theme to be front and centre on Wednesday after the bell when Cupertino delivers another strong upside March quarter based on our analysis.

“That said, all eyes will be on June guidance with the Street worried that moderation in growth and lingering chip shortage will spoil the supercycle party in Cupertino, which we strongly disagree with. We also are expecting another strong services quarter which is slated to exceed $65 billion of revenues in FY21 and remains key to the re-rating in Apple’s stock over the past year.”

Earnings calendar


  • Albertson’s (ACI) before market open;
  • Tesla (TSLA) after market close


UPS (UPS), Centene (CNC), Sherwin-Williams (SHW), General Electric (GE), 3M (MMM), Hasbro (HAS), Eli Lilly (LLY), Raytheon Technologies (RTX), JetBlue (JBLU), Crocs (CROX) before market open; Mondelez (MDLZ), Capital One (COF), Alphabet (GOOGL), FireEye (FEYE), Texas Instruments (TXN), Visa (V), Advanced Micro Devices (AMD), Pinterest (PINS), Starbucks (SBUX), Microsoft (MSFT), Amgen (AMGN) after market close


Humana (HUM), CME Group (CME), Sirius XM Holdings (SIRI), Wingstop (WING), Boston Scientific (BSX), Six Flags Entertainment (SIX), Boeing (BA), Yum Brands (YUM), Moody’s Corp (MCO), Discovery (DISCA) before market open; Apple (AAPL), Facebook (FB), eBay (EBAY), Align Technology (ALGN), Ford (F), O’Reilly Automotive (ORLY), Qualcomm (QCOM), MGM Resorts (MGM), ServiceNow (NOW), Teladoc (TDOC), GrubHub (GRUB) after market close.


Caterpillar (CAT), Intercontinental Exchange (ICE), Bristol-Myers Squibb (BMY), Comcast (CMCSA), Merck (MRK), PG&E Corp (PCG), Bloomin’ Brands (BLMN), Molson Coors (TAP), Keurig Dr Pepper (KDP), LendingTree (TREE), Overstock.com (OSTK), Altria Group (MO), Kraft-Heinz (KHC), McDonald’s (MCD), Mastercard (MA), Domino’s Pizza (DPZ), T Rowe Price Group (TROW), Royal Caribbean (RCL), S&P Global (SPGI), SolarWinds (SWI) before market open; Amazon (AMZN), Twitter (TWTR), Skyworks Solutions (SWKS), Gilead Sciences (GILD) after market close.


Colgate-Palmolive (CL), Charter Communications (CHTR), Clorox (CLX), AbbVie (ABBV), Chevron (CVX), Exxon Mobil (XOM), Goodyear Tire & Rubber Co. (GT).

Economic calendar


  • Durable goods orders, March preliminary (2.5% expected, -1.2% in February);
  • Durable goods excluding transportation, March preliminary (1.6% expected, -0.9% in February);
  • Non-defense capital goods orders excluding aircraft (1.5% expected, -0.9% in February), non-defense capital goods shipments excluding aircraft (1.5% expected, -1.1% in February);
  • Dallas Fed Manufacturing Activity Index, April (30.0 expected, 28.9 in March).


  • FHFA House Price Index, month-over-month, February (1.0% expected, 1.0% in January);
  • S&P CoreLogic Case-Shiller 20-City Composite index, month-over-month, February (1.1% expected, 1.2% in January);
  • S&P CoreLogic Case-Shiller 20-City Composite index, year-over-year, February (11.8% expected, 11.1% in January);
  • Conference Board Consumer Confidence, April (112.0 expected, 109.7 in March);
  • Richmond Fed Manufacturing Index, April (22 expected, 17 in March).


  • MBA Mortgage Applications, week ended April 23 (8.6% during prior week);
  • Advance goods trade balance, March (-$87.5 billion expected, -$86.7 billion in February);
  • Wholesale inventories, month-over-month, March preliminary (0.6% expected, 0.6% in February);
  • Retail inventories, month-over-month, March (0.0% in February); FOMC monetary policy decision.


  • Initial jobless claims, week ended April 24 (550,000 expected, 547,000 during prior week);
  • Continuing claims, week ended April 17 (3.674 million during prior week);
  • GDP annualized quarter-over-quarter, Q1 advanced print (6.5% expected, 4.3% in Q4); Personal consumption, Q1 advanced print (10.5% expected, 2.3% in Q4);
  • Core personal consumption expenditures, Q1 advanced print (2.4% expected, 1.3% in Q4);
  • Pending home sales, month-over-month, March (4.5% expected, -10.6% in February)


  • Personal income, March (20.0% expected, -7.1% in February);
  • Personal spending, March (4.3% expected, -1.0% in February);
  • Personal consumption expenditures deflator, month-over-month, March (0.5% expected, 0.2% in February);
  • Personal consumption expenditures deflator, year-over-year, March (2.3% expected, 1.6% in February);
  • MNI Chicago PMI, April (65.0 expected, 66.3 in March); University of Michigan consumer sentiment, April final (87.8 expected, 86.5 in March).