All eyes on earnings

Brace yourself: we’re heading into one of the most important weeks of the quarter when it comes to earnings reports, and lousy results could drag the market down to new depths.

Why it matters: This is a major test for important sectors of the economy, some of which are already deep into a downturn.

  • Tech: Most of the big tech companies report this week and analysts expect them to show slowing growth, but the real question is how much slower. Snap’s disappointing results last week were a warning for businesses reliant on advertising revenue, as economic uncertainty leads advertisers (and shoppers) to pull back on spending.
  • Automotive: GM and Ford both report this week, along with some major car dealers, and car-buying could be one of the first places we see consumer demand falter, as higher interest rates make borrowing to fund a vehicle more expensive.
  • Credit cards: Watch to see if Visa and Mastercard report a slowdown in consumer spending, an uptick in delinquent payments on credit card bills, or other signs of people struggling to stay on top of the rising cost of living.

Zoom out: It’s not just earnings that will drive the markets this week—investors will also be watching interest rate decisions from The Bank of Canada, The European Central Bank, and The Bank of Japan along with GDP numbers from the US.