Weekly outlook 6/5-10/5

According to FactSet statistics, 80% of companies in the S&P 500 index have released first-quarter earnings reports. Of these, about 77% of companies have exceeded expectations, surpassing the average of the past ten years by 74%, and the overall EPS annual growth rate is 5%. This is the quarter with the most significant profit growth since the second quarter of 2022. Over the past month, analysts raised their earnings expectations for the second quarter as a result. This was the first time since the third quarter of 2021, with the energy and telecom services sector making the biggest adjustments.

This week, many Fed officials will be speaking out intensively, including 2024 FOMC voting committee, Richmond Federal Reserve Chairman Barkin, permanent voting committee, New York Federal Reserve Chairman Williams, Federal Reserve Vice Chairman Jefferson, 2025 FOMC voting committee, Boston Federal Reserve Chairman Collins, Federal Reserve Governor Bowman, and Federal Reserve Governor Barr. The market will pay close attention to their remarks on interest rate cuts.

In terms of technology stocks, PLTR will announce the progress of its enterprise's AI deployment this Monday night, and on Wednesday night, it will focus on ARM, which has benefited from the AI wave and the recovery of the mobile phone market. Following the last increase in the annual guidelines, the stock price surged by more than 40%. Whether this season can still bring surprises. Uber's ride-hailing business momentum, profit growth, and progress in the advertising business are worth watching. At the same time, it is also necessary to observe whether SHOP, AFRM, and CPNG can take advantage of the recovery of the e-commerce market, as well as the prospects of the digital advertising market that TTD will provide. Furthermore, the progress of Unity's restructuring plan, which began at the end of last year, is also worth watching.

Finally, we can also observe the overall situation of the market through these financial reports. Overall, more than 75% of the shares in the S&P 500 index this quarter surpassed the company's EPS expectations. Coupled with the overall slowdown in the US labor force and wages last week, expectations of interest rate cuts have been boosted.