Corporate earnings will be in focus this week with Google, Facebook, Verizon, Amazon, all reporting earnings as investors watch for signs about how well U.S. companies performed last quarter when the U.S. dollar rallied higher and impacted profit margins.
Last week the U.S. dollar fell the most in a month after U.S. retail sales from March missed estimates, jobless claims rose, earnings failed to impress, and investors pushed back the timeline for when the Federal Reserve will begin to raise interest rates which hasn’t occurred since 2006.
An upcoming meeting on Friday April 24th in Riga, Latvia between Greek government leaders and Euro group finance ministers is expected to draw attention this week even as expectations fall that a new bailout deal will be reached at the meeting and the new final deadline is reported to be on May 11th during a European Summit.
Greece is hoping to receive it’s final €7.2 billion bailout funds that is conditional on Athens presenting a list of approved reform measures while offering more concessions to raise liquidity.
Greece’s far leftist government led by Syriza remains philosophically opposed to austerity measurers and has resisted previous commitments to privatize state assets and lower welfare benefits.
The “red line” list that Athens has drawn in the sand with its creditors includes labor reform, pension reform, value added taxes, and privatizations or the “development of state property” as Greek Prime Minister Alexis Tsipras referred to it when describing the points of contention to Reuters last Thursday.
Some of the main areas of agreement between the two sides includes fighting corruption, improving tax collection, and redistributing the tax burden.
Greece is faced with a series of payments to make to its international creditors which Athens now refers to as the “institutions” in a clear lingual break from its previous term “troika” consisting of the EU, ECB, and the IMF.
Greece is faced with nearly €1 billion in payments in early May.
On May 1st Athens has to pay €200 million in interest followed by €746.6 million due on May 12th to the IMF.
On May 8th Athens has to refinance maturing T-bills worth €1.4 billion and another €1.4 billion on May 15th.
Debt repayments continue in June while in July and August the government in Athens will be confronted with €6.7 billion of maturing bonds held by the ECB.
Week In Focus- U.S. Economic Data
As earning season heats up, U.S. economic data will be light this week with existing home sales reported on Wednesday, followed by new home sales and initial/continuing claims on Thursday, and durable orders for March reported on Friday.