Image source: Wikipedia

The Federal Reserve meets this week. Spoiler alert: Essentially no one thinks a rate cut is likely. Meanwhile, it’s another peak week for corporate earnings. So far, 65% of S&P 500 Index (SPX) companies have reported and earnings are up 13% from the prior-year quarter.

The earnings calendar this week includes Walt Disney Co. (DIS), Uber Technologies Inc. (UBER), DoorDash Inc. (DASH), and Novo Nordisk AS (NVO) on Wednesday; and Anheuser-Busch Inbev SA (BUD), Warner Bros. Discovery Inc. (WBD), and Cloudflare Inc. (NET) on Thursday.

S&P 500 Index (SPX)

The 13% growth we’ve seen so far is above the consensus that called for EPS growth of about 3%-8%. It also follows 17% growth in 4Q24 EPS and 9% growth in 3Q24, according to LSEG. For the current quarter, healthcare is the leading sector, with earnings up 45%, and energy is the bottom, down 18%.

On the economic calendar, the big event is the Fed’s rate decision comes on Wednesday. Odds are only at 3% for a rate cut, according to the CME FedWatch rate tool.

Turning to other data, the Atlanta Fed GDPNow measure forecasts 1.1% for 2Q. This follows the surprise decline of 0.3% for 1Q GDP printed last week. The Cleveland Fed Inflation Nowcast forecasts a 2.2% rate for CPI in May, which is lower than the April rate and close to the Fed’s 2% target.

After this week, the Fed’s next meeting is on June 18, with odds at 42% for a rate cut. That’s lower than last week’s odds, according to the CME FedWatch rate tool. After that, the Fed meets on July 30 and odds for a cut jump to 89%.

More By This Author: