Here Are the Most Important Earnings Reports to Watch This Week

If you thought last week, with 34% of S&P 500 firms reporting, was profitable, wait till you get a load of what's coming up fast.

The big-cap tech companies - Facebook Inc. (NASDAQ: FB), Microsoft Corp. (NASDAQ: MSFT), and Inc. (NASDAQ: AMZN) - all exceeded expectations, helping drive the S&P 500 to fresh all-time highs.

And the fireworks aren't even close to over. We're at the start of the second busiest reporting week of the season, with 135 - fully 27% - of S&P 500 companies scheduled to report.

However, we're looking at a relative few big influencers...

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Market Driver No. 1: Apple

Apple Inc. (NASDAQ: AAPL) will report earnings after the close on Tuesday. Not much is expected - either good or bad - from the world's second biggest company by market capitalization (trailing only Microsoft - and by a small margin at that).

IPhone sales are expected to be lower than a year ago, with that drop partially offset by double-digit growth in services - an increasingly important business segment for Apple. With those added together, analysts are still expecting a 6.1% drop in revenue versus the same quarter last year.

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With such subdued expectations, any of three things could actually move the stock higher:

  • IPhone sales numbers beating lowered expectations.
  • Better than expected year-over-year (YoY) services revenue growth.
  • Or most importantly, profit margins that exceed expectations. Price cuts are in place to drive iPhone sales, so if overall profit margins for the past quarter and guidance for next quarter both remain healthy, that will give traders and investors hope for continued stock price momentum.

Market Driver No. 2: Google

Google's parent company, Alphabet Inc. (NASDAQ: GOOGL), will announce today (Monday, April 29) after the close. The online search and advertising titan is sitting just 1.1% below its all-time high. After strong advertising results from Facebook and Amazon, Google needs to show it's keeping up with its mega-cap peers. The trouble is, past results have shown some problems with pricing power. That will be a key metric to watch - if the price per ad that Google is commanding slips again, that could provide short-term stock price problems in the face of strong competition. This could be a buying opportunity, and I'll be watching this one closely to recommend a fast-moving potential triple-digit winning trade for my paid subscribers.

Market Driver No. 3: the Pharmaceutical Sector

This is bigger than any one stock. Some of the biggest, most important names in this $934 billion arena are reporting tomorrow (Tuesday, April 30). Reporting will set the tone for the group for weeks, if not months, to come.

In fact, I'm calling it a "day of reckoning." Eli Lilly & Co. (NYSE: LLY), Pfizer Inc. (NYSE: PFE), and Merck & Co. Inc. (NYSE: MRK) all report. Together, these three companies are packing more than half a trillion dollars ($544 billion) in market capitalization. If any one or all of these three "elephants" sneeze, look for the entire sector to catch a cold. The SPDR S&P Pharmaceuticals ETF (NYSEArca: XPH) is the broad play there, however these stocks move.

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About the Author

D.R. Barton, Jr., Technical Trading Specialist for Money Map Press, is a world-renowned authority on technical trading with 25 years of experience. He spent the first part of his career as a chemical engineer with DuPont. During this time, he researched and developed the trading secrets that led to his first successful research service. Thanks to the wealth he was able to create for himself and his followers, D.R. retired early to pursue his passion for investing and showing fellow investors how to build toward financial freedom.

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