5 Important Developments to Follow This Week

The Fed will be more in the spotlight next week with expectations of a big rate hike. The world's largest companies and most of the S&P 500 index will report. Economic data and developments in Ukraine will also continue to attract attention.

Here's what you need to know as we start the new week:

Fed Meeting

Inflation reports are still showing elevated levels, leading to expectations of a 75 basis point (bp) rate hike by the Fed. A 100 bp hike is also a possibility and Fed funds futures prices give it about a 20% chance, but reports suggest that the Fed will not go that far. In some ways, the FOMC statement and Fed Chair Powell's press conference may have a positive impact as the market tries to understand the extent of the possibility of a recession and how determined the Fed would be to reduce inflation if there is a recession. We are sure to hear the phrase "splitting hairs" a few times this week as there is talk of a rate cut next year.

Reports from big tech names

The world's biggest companies will report earnings this week, and most of them are names from the tech sector. The party starts on Tuesday with Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL). Alphabet, in particular, will be notable for its lack of guidance and early jolts from Snap (NYSE:SNAP) and Twitter in the digital advertising space. Meta Platforms, the parent company of Facebook (NASDAQ:META), will present its report on Wednesday. Meta has been outspoken about its investment plans for this year and the Tik Tok and pandemic-related challenges that have led to a 50% drop in value so far this year. Whether they see any change in the situation and whether they are still committed to their investments in the metaverse will be important factors in this report. Amazon.com (NASDAQ:AMZN) reports on Thursday, and like Facebook, it has shared some bad news. While GAAP net income could be skewed by Amazon's stake in Rivian Automotive Inc (NASDAQ:RIVN), revenue momentum and how the retail and cloud giant deals with cost inflation will be key items.

S&P 500 earnings reports

Many other industry giants will also share their earnings reports. These names include:

• NXP (NASDAQ:NXPI), Whirlpool Corporation (NYSE:WHR), F5 Networks (NASDAQ:FFIV)
• Ahead of the market on Tuesday - Coca-Cola (NYSE:KO), McDonald's (NYSE:MCD), United Parcel Service (NYSE:UPS), Raytheon (NYSE:RTN), General Electric (NYSE:GE), General Motors (NYSE:GM)
• After the market closes on Tuesday - Visa (NYSE:V), Chipotle (NYSE:CMG), Stryker (NYSE:SYK), Mondelez (NASDAQ:MDLZ), Texas Instruments (NASDAQ:TXN)
• Ahead of the market on Wednesday - T-Mobile US (NASDAQ:TMUS), Bristol-Myers Squibb (NYSE:BMY), Boeing (NYSE:BA), ADP (NASDAQ:ADP), Humana (NYSE:HUM)
• After the market closes on Wednesday - Ford (NYSE:F), Qualcomm (NASDAQ:QCOM), ServiceNow (NYSE:NOW), Equinix (NASDAQ:EQIX), O'Reilly Automotive Inc (NASDAQ:ORLY)
• Ahead of the market on Thursday - Mastercard (NYSE:MA), Honeywell (NASDAQ:HON), Pfizer (NYSE:PFE), Merck & Co (NYSE:MRK), Comcast (NASDAQ:CMCSA), Altria (NYSE:MO)
• After the market closes on Thursday - Intel (NASDAQ:INTC), Edwards Lifesciences (NYSE:EW), KLA-Tencor (NASDAQ:KLAC), DexCom Inc (NASDAQ:DXCM)
• Friday pre-market - Exxon Mobil (NYSE:XOM), Procter & Gamble (NYSE:PG), Chevron (NYSE:CVX), AbbVie (NYSE:ABBV), AstraZeneca (NASDAQ:AZN), Charter Communications (NASDAQ:CHTR)

GDP and CPI figures

Towards the end of the week, CPI and GDP figures will be released. While most of these will be backward looking, they can give us an idea of what we will see in terms of the economy and the behavior of the central bank.

Ukraine-Russia developments

The Russian-Ukrainian war continues, with a Russian missile attack on the port on Saturday despite an agreement allowing Ukraine to ship grain through the port of Odessa. Russia denies its role in the attacks, while Ukraine continues to prepare for grain shipments that are expected to provide major relief for global food shortages.