Meta, Microsoft, Amazon, Apple report alongside a Fed decision and June PCE. Oil prices add uncertainty. Boeing, Starbucks, Corning also in focus. Linde and Eaton close the week.
The busiest week of summer earnings season arrives with a packed calendar. Ten CNBC Investing Club holdings report, including three of the four hyperscale cloud providers. The Federal Reserve meets Wednesday. The June PCE price index, the central bank's preferred inflation gauge, lands Thursday morning. Oil prices, up sharply after renewed U.S.-Iran fighting, add a layer of uncertainty to both the earnings and the policy outlook.
Meta Platforms, Microsoft, and Amazon report across Wednesday and Thursday nights. Apple reports Thursday as well. The bar for Meta is lower than last quarter: the stock is 11% below its pre-April earnings level, the Club said. The focus will be on AI capex guidance and any plans for a cloud business to rent out excess compute. For Microsoft, Azure growth remains the critical metric. The company must explain how it balances internal compute allocations with resources to rent externally, given its continued investment in Copilot and first-party AI models. Amazon's advantage, the Club noted, is its agnostic approach to model offerings, which may position it best for the shift to more efficient AI usage. AWS growth will be the key metric, and investors will compare rates across the three platforms. Apple's Services business will get more attention than usual. The company decided it could not leave Mac and iPad prices unchanged due to soaring memory costs. Analysts will ask about customer reception to those price hikes. This will be CEO Tim Cook's last call before he transitions to executive chairman in September.
Across the three, AlphaScala scores are Moderate: Meta at 65, Microsoft at 61, Amazon at 58.
The two-day Fed meeting ends Wednesday with a rate decision and Chairman Kevin Warsh's press conference. Resurgent oil prices have added intrigue. The market prices a one-third chance of a quarter-point hike Wednesday and a 95% chance of a hike by September, according to CME FedWatch data cited by the Club. Warsh recently told Congress the Fed is responsible for controlling inflation over the medium term. He has also said the central bank cannot control short-term bursts of inflation. The question is how long that medium term is, given five months of war-driven pressure on energy prices. Another debate: whether the AI capex boom is causing a generalized rise in prices. Fed Governor Lisa Cook flagged this as a risk in a mid-July speech, the Club noted. Warsh believes AI will be deflationary over the long run. He may be asked about the spending boom's current impacts.
Thursday morning brings the June PCE price index. Economists polled by FactSet expect the headline PCE to decline 0.07% from May and be up 3.7% year over year. The core PCE, which strips out food and energy, is expected to rise 0.2% month over month and be up 3.3% annually. Bank of America's economists wrote in a note that underlying inflation trends remain well above the Fed's 2% target, even excluding special factors that are likely temporarily boosting inflation. They said tighter policy rates are warranted rather than an extended pause. Also Thursday: the first reading of second-quarter GDP.
Boeing reports Tuesday. Free cash flow is the critical metric. The Club expects a cash burn of $179 million in the second quarter before turning positive in the second half. Corning reports Tuesday as well. The stock has been crushed after a rally on no news at the end of June. Management needs to reaffirm its status as a key beneficiary of data center capex, the Club said. Starbucks reports Wednesday night. After last quarter's turnaround, investors want confirmation of sustained same-store sales growth and a second straight quarter of year-over-year improvement in adjusted operating margins. The week closes with Linde and Eaton on Friday. Linde's volumes in North America, where manufacturing activity has picked up, will be in focus. Eaton's data center backlog stands at 228 gigawatts, or 12 years worth based on 2025 build rates.
The Fed delivers its decision at 2 p.m. ET Wednesday. Warsh's press conference follows at 2:30 p.m.
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