Earnings reports from Amazon (AMZN) and Alphabet (GOOG) after the close today. Earnings from ExxonMobil(XOM) before the open tomorrow. The advance report on third quarter U.S. GDP at 8:30 a.m. New York time tomorrow.
Yep, the financial markets in New York are going to have a lot to digest when they open on Friday morning.
Amazon and Alphabet have been key to driving stocks higher in 2016–Amazon shares are up 21.4% in 2016 and Alphabet is up 4.7%–but that also leaves them vulnerable on Friday to disappointment (Amazon trades at a price-to-earnings ratio of 205) and profit taking. On the other hand, revenue earnings growth could be strong enough to power these shares, and the market in general, higher.
ExxonMobil is the biggest fish in the oil industry sea and traders and investors will be looking to see what the company says about the direction of future oil prices (both in words and in its budget for capital spending). I’m interested in seeing what ExxonMobil reports on its success/failure in replacing reserves (Is it pumping more oil than it’s finding) and to hear if the company addresses Wall Street concerns about how it is valuing reserves and whether or not the company has been marking them to market at a reasonable pace.
And finally, economists surveyed by Briefing.com are looking for the first read on third quarter GDP to show the economy growing at a 2.5% rate. Last quarter GDP grew at just 1.4%. Anything below 2%is likely to be seen as a disappointment and anything above 3% would be seen as yet more evidence that the Federal Reserve will raise interest rates again at its December 14 meeting. Not that the financial markets need much more convincing. The CBOE FedWatch calculations show the Fed Funds Futures market pricing in a 78.5% chance that the Fed will praise rates in December.