Global Highlights for This Week: Google & Amazon Earnings Loom; Nonfarm Payrolls Test U.S. Economic Strength
Last week, the three major U.S. indices closed mixed. The Dow fell 0.42%, the S&P 500 rose 0.34%, and the Nasdaq declined 0.17%.
A big part of the Dow's underperformance came from Microsoft’s sharp drop after its cloud sales growth slowed and it announced record capital expenditure plans. This week, Microsoft’s cloud peers — Amazon and Google — will report earnings.
Recently, financial markets have grown more cautious toward U.S. tech giants. Investors are becoming pickier about which companies can truly monetize massive AI spending — especially those that previously surged on AI profit expectations.
Jim Baird, Chief Investment Officer at Plante Moran Financial Advisors, said: “Companies whose expectations have been raised very high now need to deliver real results to prove themselves. Even solid growth can lead to punishment if it misses market hopes.”
Sid Vaidya, Chief Investment Strategist at TD Wealth, noted: “While reactions to some big-tech earnings have been mixed, one thing is clear — capex for building AI infrastructure is not slowing down.”
This week also features several AI-related earnings: chip names like AMD, Qualcomm, Arm, and NXP, plus software firm Palantir. Pharma stocks are clustered too, including Eli Lilly and Novo Nordisk, which may provide updates on obesity treatment developments.
After-hours Thursday, Barrick Gold reports. As the world’s third-largest gold miner by market cap (behind Newmont and Agnico Eagle), its profitability is worth watching amid a year of soaring precious-metal prices.
Speaking of gold, last Friday saw an “epic” plunge in gold and silver prices, rattling the precious-metals market. The drop followed President Trump’s announcement that he will nominate former Fed Governor Kevin Warsh to succeed Jerome Powell as Fed Chair.
Some view Warsh — who has publicly criticized quantitative easing — as potentially shifting the Fed toward a more hawkish stance. His nomination also eased earlier concerns about Fed independence, helping the dollar strengthen and pressuring gold/silver lower.
It remains unclear when Warsh will make his first public appearance post-nomination. Analysts believe his initial speech or interview could significantly impact markets, with close attention on his views on U.S. employment, inflation, and current monetary policy.
On the first Friday of the month, the U.S. Bureau of Labor Statistics releases January’s Employment Situation report (nonfarm payrolls). Consensus expects nonfarm payrolls to rise by 64,000, with the unemployment rate holding at 4.4%.
Michael Reynolds, Vice President of Investment Strategy at Glenmede, said: “Due to last year’s government shutdowns, we’ve lacked clear visibility on labor market and inflation conditions, so this data may carry more weight than usual.”
This Week's Major Overseas Economic Events:
Monday : Bank of Japan January Monetary Policy Meeting Minutes, Eurozone January Manufacturing PMI Final, U.S. January S&P Global Manufacturing PMI Final, U.S. January ISM Manufacturing PMI
Tuesday (Feb 3): Atlanta Fed President Bostic speaks, Reserve Bank of Australia rate decision + monetary policy statement, U.S. December JOLTS Job Openings, Fed Governor Bowman speaks
Wednesday (Feb 4): Eurozone January Services PMI Final, Eurozone January CPI YoY Flash, U.S. January ADP Employment Change, U.S. January S&P Global Services PMI Final, U.S. January ISM Non-Manufacturing PMI
Thursday (Feb 5): Bank of England rate decision, European Central Bank rate decision, Atlanta Fed President Bostic participates in monetary policy dialogue & Q&A, U.S. Initial Jobless Claims (week ended Jan 31)
Friday (Feb 6): Bank of Canada Governor Macklem speaks, U.S. January Nonfarm Payrolls (seasonally adjusted), U.S. February University of Michigan Consumer Sentiment Preliminary
Saturday (Feb 7): U.S. Baker Hughes Total Rig Count (week ended Feb 6)
Sunday (Feb 8): Japan House of Representatives election