Global markets and investors will be focusing on the US this week, as we could get further clarity on when the first rate hike will come from the Fed.
This week’s US GDP reading is expected to show that the US economy grew less than predicted, and this will more or less cement the market’s opinion that we will be looking until at least early 2016 for interest rate rises to begin.
We could well see many asset classes fairly subdued before the GDP reading. However, one thing that will get investors interested will be the focus on earnings, as a number of high profile consumer and energy firms look to save the S&P 500 from an overall earnings miss for the quarter.
The headliner will be Apple, which will show us how many new iPhones, iPads and Apple Watches have been sold in the last year. Analysts expect Apple to post earnings of $1.88 per share, up from $1.42 in the year previous.
Typically the fourth quarter is the second weakest, however analysts are expecting bumper sales of the iPhone, boosted by the release of the iPhone 6s back in September. Shares are trading lower by 5 per cent over the last three months compared to a small increase in the Dow.
However, don’t feel sorry for shareholders as the stock is still trading higher by 13 per cent over the last 12 months.
The next few days may be subdued in the Eurozone. But with European and German data the major focus, for the rest of the week the Eurozone is likely to hold much more importance, especially after Mario Draghi hinted at more QE.
ETORO INVESTMENT ANALYST
Apple is the most traded stock on the eToro platform at the moment, and clients have been piling in over the course of the week in anticipation of some real bumper numbers when the company reports its earnings today.
On the eToro platform, over 99 per cent of those trading the stock are bullish and are holding long positions into today’s data, with over 130,000 active traders on the watchers list waiting for an opportunity.
Whether we see a strong reading or not, a lot will depend on the guidance. As we know, strong numbers alone don’t always translate into a soaring share price.