👉 5 of the Magnificent 7 Report Earnings This Week

Welcome to your new week.

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Key Earnings Announcements:

FIVE of the Magnificent Seven report earnings this week.

Monday (10/27): Avis Budget Group, Celestica, Keurig Dr Pepper, NXP Semiconductors, Rambus, Waste Management, Whirlpool

Tuesday (10/28): Amkor Technology, Booking Holdings, Community Healthcare, Corning, D.R. Horton, Enphase, Fiserv, HSBC, JetBlue, ONEOK, PayPal, Royal Caribbean, SoFi, Texas Instruments, UPS, Visa, Wayfair

Wednesday (20/29): ADP, Alphabet, Boeing, Caterpillar, Centene, Chipotle, CVS Health, Etsy, Fiserv, Kraft Heinz, Mercado Libre, Meta, Microsoft, Phillips 66, ServiceNow, Sprouts Farmers Market, Tesla, Verizon

Thursday (10/30): Amazon, Apple, Baxter, Comcast, Coinbase, Honeywell, Insmed, Lilly, Linde, Merck, Reddit, Roblox, Rocket Companies, Roku, Western Digital

Friday (10/31): AbbVie, Charter Communications, Chevron, Cboe, Colgate-Palmolive, CN (Canadian National Railway), ExxonMobil, LyondellBasell, Nine Energy Service

What We’re Watching:

1. Alphabet (GOOGL)

Alphabet (+37.3% YTD) reports Q3 FY2025 earnings Wednesday after the close, with investors watching whether momentum in Google’s advertising, cloud, and AI businesses can sustain double-digit growth amid heavier infrastructure spending and ongoing regulatory scrutiny. The company remains the backbone of digital advertising, but its multibillion-dollar push into AI infrastructure and data centers has put renewed pressure on margins and free cash flow.

In Q2, Alphabet posted $96.4 billion in revenue (+14% YoY) and $2.31 in EPS (+22%), both above expectations. Strength in Search, YouTube, and Google Cloud drove results, with Cloud revenue up 32% to $13.6 billion and operating margin steady at 32.4%, despite higher depreciation tied to AI buildouts. The company also expanded its capital return program while continuing to invest in its AI ecosystem through Gemini, YouTube AI tools, and the Android ecosystem.

Heading into this quarter, I’ll be watching whether AI-driven enhancements in Search and YouTube can translate into incremental ad monetization, and if Cloud’s growth can continue to offset rising costs. Management’s commentary on capex guidance, regulatory risk, and cost discipline will also be key for market sentiment.

• Analysts expect $2.27 GAAP EPS on Revenue of $100.10 billion.

• You can explore the most recent GOOGL investor release here and here.

2. Microsoft (MSFT)

Microsoft Corporation (+24.2% YTD) reports Q4 FY2025 earnings Wednesday after the close, with investors closely monitoring whether the software and cloud giant’s AI-led growth can translate into resilient margin and guidance upside amid escalating infrastructure spending. Microsoft remains a pillar of enterprise tech by integrating productivity tools, cloud services and AI.

In the prior quarter, Microsoft posted $70.1 billion in revenue (+13% YoY) and $3.46 in EPS (+18%), powered by a 20-22% YoY jump in Microsoft Cloud to ~$42.4 billion and a 33% expansion in Azure and other cloud services. Despite the strong numbers, operating margin narrowed slightly due to AI infrastructure scale-up.

Heading into this release, I’ll be watching whether Microsoft can turn its AI momentum into higher ARPU across Microsoft 365, continue its Azure growth in the 30%+ range, and deliver capital-return clarity during this heavy spending period. How management frames demand, cost leverage and geographical resilience – especially in cloud-sensitive regions – will be critical for the stock’s next leg.

• Analysts expect $3.66 GAAP EPS on Revenue of $75.39B billion.

• You can explore the most recent MSFT investor release here and here.

Investor Events / Global Affairs:

Adobe hosts its MAX 2025 conference, Honeywell completes spin-off of Solstice Advanced Materials, and the Trump–Xi Meeting set the stage for a possible deal breakthrough at APEC.

• Adobe (ADBE) MAX 2025 Conference

Adobe (-20.5% YTD) will host its three-day MAX 2025 Creativity Conference in San Francisco this week, bringing together designers, illustrators, photographers, and creators to explore the future of digital expression and AI-powered design.

Notable participants include Nvidia, Amazon, and Dell Technologies – all showcasing how generative AI is reshaping creative workflows and hardware performance. The event is expected to spotlight Adobe Firefly, AI-driven content tools, and new cross-platform integrations aimed at empowering creators in the next era of digital media.

• Honeywell (HON) Completes Spin-Off of Solstice Advanced Materials

Honeywell (-4.3% YTD) will officially spin off its advanced materials division, creating a new publicly traded company called Solstice Advanced Materials (SOLS). The separation is designed to sharpen Honeywell’s focus on automation, aerospace, and industrial software, while giving Solstice independence to expand in specialty chemicals and sustainable materials.

Shareholders of record as of October 17 will receive one share of Solstice for every four shares of Honeywell held. 

• Trump–Xi Meeting Sets Stage for Possible Breakthrough at APEC

Markets are eyeing this week’s Trump–Xi meeting in South Korea for signs of lasting de-escalation after months of tariff threats and trade turbulence. The White House confirmed that the 100% tariff threat on Chinese goods is off the table following a productive round of talks with top Chinese trade officials, paving the way for a potential deal framework ahead of Thursday’s face-to-face meeting.

Both sides appear to be negotiating from strength – with the U.S. pressing for soybean purchases, delayed rare-earth export restrictions, and anti-fentanyl measures, while China seeks relief from certain 20% U.S. tariffs and assurances around tech access. Trump has also floated broader goals including the TikTok sale resolution and potential Chinese cooperation on Ukraine diplomacy.

The meeting coincides with the 2025 APEC Summit in Gyeongju, bringing together 21 Pacific Rim economies to discuss trade and regional coordination. The tone between Trump and Xi – whether conciliatory or confrontational – could set the tone for markets into November.

Major Economic Events:

Powell speaks, FOMC interest-rate decision, and a new PCE release this week

Monday (10/27): Durable Goods Orders, Durable Goods Minus Transportation

Tuesday (10/28): Consumer Confidence, S&P Case-Shiller Home Price Index (20 Cities)

Wednesday (10/29): Advanced U.S. Trade Balance in Goods, Advanced Retail Inventories, Advanced Wholesale Inventories, Fed Chair Powell Press Conference, FOMC Interest-Rate Decision, Pending Home Sales

Thursday (10/30): Fed Vice Chair for Supervision Michelle Bowman Speaks, GDP, Initial Jobless Claims

Friday (10/31): Chicago Business Barometer (PMI), Cleveland Fed President Hammack and Atlanta Fed President Bostic Speak, Consumer Spending, Core PCE Index, Core PCE Year Over Year, Dallas Fed President Lorie Logan Speaks, Employment Cost Index, PCE Index, PCE Year Over Year, Personal Income

What We’re Watching:

1. Core PCE Index

The Core Personal Consumption Expenditures (PCE) Price Index – the Federal Reserve’s preferred measure of underlying inflation – rose +0.2% MoM in August, matching July’s pace and expectations. On an annual basis, core PCE increased +2.9% YoY, unchanged from the prior month and consistent with the Fed’s projections.

With both headline and core readings aligned with forecasts, the report reinforces expectations for the Fed to proceed cautiously with additional rate cuts later this year, following September’s 25bps move.

Economists expect the following this week:

• Core PCE (MoM): +0.2% vs. +0.2% prior

• Core PCE (YoY): +2.9% vs. +2.9% prior

2. FOMC Interest-Rate Decision

The Federal Reserve cut the federal funds rate by 25bps in September, bringing it to the 4.00%–4.25% range, marking the first rate reduction since December. The decision came amid easing inflation and growing signs of labor-market cooling.

The vote was 8-1, with newly appointed Governor Stephen Miran dissenting in favor of a larger 50bps cut. In its updated projections, the Fed signaled two additional cuts (totaling 50bps) by year-end and another quarter-point reduction in 2026, a slightly more dovish path than forecast in June.

The central bank’s new Summary of Economic Projections (SEP) revised GDP growth higher across the board – 1.6% for 2025 (vs. 1.4%), 1.8% for 2026 (vs. 1.6%), and 1.9% for 2027 (vs. 1.8%) – reflecting resilience in consumer spending and investment. Meanwhile, PCE inflation was left unchanged at 3.0% for 2025 but raised to 2.6% (from 2.4%) for 2026, suggesting the Fed still sees a slow path back to its 2% target. Core PCE followed a similar trend, holding at 3.1% for 2025 and ticking up to 2.6% for 2026.

Economists expect the following this week:

• Fed Funds Rate: 4.00%-4.25% vs. 4.25%-4.50% prior

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