Weekly equities forecast: Amazon, Apple & HSBC earnings previews

• Amazon Q1 earnings - Tuesday April 30.
• Apple Q2 earnings - Thursday May 2. 
• HSBC Q1 earnings  Tuesday April 30

Last week, the S&P 500 rose 2.5%, snapping a three-week losing run. Upbeat market reactions to earnings from Tesla, Alphabet, and Microsoft offset disappointment from Meta. Earnings were in the driving seat, with the market barely reacting to hotter-than-expected inflation and yields rising to a five-month high.

Earnings continue to roll in this week, as well as the FOMC rate decision and non-farm payroll data, which could also impact sentiment. A more hawkish-sounding Fed and ongoing strength in the US jobs market could drive market direction and earnings.

Amazon earnings preview

Amazon will release Q1 earnings as its share price trades 18% higher YTD, outperforming the broader market, which has traded up 8% so far in 2024. Expectations are for a jump in Q1 EPS and revenue.

The results follow last week's announcements of new initiatives, including a grocery delivery subscription service and new AI tools. A big focus will also be on AWS and the potential upside in advertising revenue after its 24% growth in 2023 to $47 billion. Investors will look for signs of this impressive growth continuing.

Meanwhile, Amazon Web Services (AWS), one of the company’s most-watched growth metrics, is expected to record 15% year-over-year growth as more businesses shift their data storage to the cloud, up from 13% the previous year.

Wall Street is expecting:

EPS of $0.83 and revenue of $142.53 billion.

Vs EPS $0.31 on revenue of $127.36 billion in Q1 2023.

Amazon forecast – technical analysis

After falling from the all-time high of 189.80, Amazon trended lower before finding support on the 100 SMA. The price rebounded and is testing the 50 SMA. The long lower wick on Thursday’s candle suggests there was little buying-selling demand at the lower price and could indicate the end of a downtrend.

Strong earnings could help propel the price back up to 189.70 and fresh all-time highs. Support can be seen at 166.00, the 100 SMA, and the weekly low.

Apple earnings preview

Apple will report Q2 earnings as the share price trades down 14% YTD, underperforming the broader market. The selloff reflects concerns over iPhone sales in China, a weaker consumer environment, and investors punishing Apple for its slow start to the AI race.

iPhone sales remain Apple's primary driver, and investors are bracing for a weaker quarter, which the firm warned about. Headwinds in China, a key market where reports point to a 19% decline in iPhone sales and longer replacement cycles globally, could also hurt iPhone numbers.

However, profitability could still be strong, offsetting slower sales as Apple also benefits from a stronger services business. There are unlikely to be any major AI updates, as the firm appears to be sticking to its late-to-market but with a superior product strategy.

Wall Street is expecting:

 EPS of $1.50 on revenue of $89.8 million

Vs. $1.88 on $117.51 billion in Q2 2023.

Apple forecast – technical analysis

Apple trades within a longer-term falling channel. The price recently rebounded off 165, the October 2023 low, as it looks towards 178.00, the April high. It would take a rise above this level for bulls to take back control.

Sellers will look to retest 165.00, opening the door to 156.00, the February 2023 high.

HSBC earnings preview

HSBC is the last of the big banks to report. Expectations are for HSBC to follow in the footsteps of its peers, posting a fall in earnings amid a squeeze on margins amid intense competition for mortgages and deposits, and on the expectations that central banks will cut rates this year. However, HSBC differs from other UK banks because it focuses on Asia. However, that may not be positive, given the ongoing property crisis in the region and amid headlines that the group wrote down the value of its stake in BoCom, a Chinese bank, by $3 billion.

The bank may be buoyed by changing rate expectations in the US amid growing doubts that the Fed will be cutting rates any time soon. The increasing likelihood that US rates will stay high for a longer period could help lift guidance.

HSBC forecast – technical analysis

HSBC broke out of range and traded within a rising channel, trading above 660p, around an all-time high. The RSI supports further upside while it remains out of overbought territory.

Buyers will look to rise above 667p to fresh all-time highs. Support is seen at 630p.