The Week Ahead In US Markets: Tech Earnings Season To Begin (NFLX, TSLA, TSM)

As we move into the third week of July, markets turn their focus to a slate of corporate earnings, with Netflix and Tesla poised to lead the way. The streaming giant Netflix has seen it's stock price (NASDAQ: NFLX) perform strongly in 2024, up 38% on a YTD basis. The firm will kick off the tech earnings this week as the calendar gets into full flow.

Tesla has experienced an up and down start to 2024, with the recent rally over 1 month bringing 32% gains to holders. On a YTD basis however, the stock (NASDAQ: TSLA) has failed to remain green, with a 0.1% drop now looking like it may be in the rear-view if the more recent sentiment continues.

Alongside Netflix, the spotlight will also shine on two major semiconductor companies, ASML and Taiwan Semiconductor Manufacturing Company (TSM), as they too release their financial results after very strong starts to 2024.

Wednesday is the day to watch for TSLA and ASML enthusiasts, whilst Thursday will see NFLX, and TSM deliver their respective numbers.

This week will also see the wrap-up of financial reports from top Wall Street banks, with Goldman Sachs (GS), Charles Schwab (SCHW), Morgan Stanley (MS), and Bank of America (BAC) all set to publicize their outcomes. Each will release on Tuesday, apart from Goldman (today).

Economically, the Federal Reserve seems poised to start cutting interest rates from September, responding to a multi-year low in annual inflation combined with a creeping unemployment rate. This significant move is anticipated closely, especially as Fed Chair Jerome Powell is scheduled to hold a press conference on July 31, after the Fed's next two-day policy meeting.

The labour market, a crucial indicator of economic health, is also sending signals of concern. The unemployment rate is now on the threshold of activating the Sahm Rule, an economic indicator that has heralded each of the last nine US recessions by measuring the increasing rate of unemployment.

The week ahead promises critical company earnings reporting and potentially pivotal economic indicators. As Netflix sets the tone in Big Tech, the financial world will also watch for the key decision from the Federal Reserve amid troubling signs in the labour market.