New data this week: Tech Giants’ reports and GDP statistics

Wall Street is in for a hectic final week in October, as some of the biggest companies report their financial results and the government releases its quarterly assessment of the U.S. economy.

As for the reports, they will be presented by technology giants Microsoft, Alphabet, Apple and Amazon, which together represent about a quarter of the S&P 500 index. A total of 165 companies will release quarterly reports during the week.

On Tuesday, Google's parent company Alphabet will be the first of the tech giants to report for the quarter. Analysts warn that macroeconomic problems will reduce the company's growth rate.

Problems are expected to show up in Amazon's results on Thursday, too, given that roughly 30% of the e-commerce conglomerate's revenues are generated internationally, according to CFRA research estimates. The same goes for Microsoft, with analysts at Goldman Sachs warning that "foreign exchange headwinds remain excessive", even though demand for the company's commercial offerings for its PC and cloud services is likely to remain steady.

As for Apple, iPhone demand dynamics will be one of the most important factors tracked by stock watchers. Morgan Stanley analyst Eric Woodring predicted in a recent note that "demand has been better than expected in recent months".

Investors will also be concerned about a slew of economic reports, with preliminary third-quarter GDP data due to be released Thursday topping the list. Economists expect the preliminary estimate to show that the U.S. economy grew 2,3% last quarter after consecutive GDP contractions in the first and second quarters, according to the Bloomberg consensus forecast.

Weekly economic reports on the calendar also consist of the S&P Case-Shiller Home Price Index, new and expected home sales data, and the Conference Board Consumer Confidence Index.

According to Ian Shepherdson, chief economist at Pantheon Macroeconomics, the expected recovery in GDP, which represents the broadest measure of economic activity, is tied to the net export rebound, a correction after declines in Q1 and Q2 and technical factors boosting inventories.

Shepherdson referred to higher rates, falling stock prices and a strong dollar. He also stated the outlook for the first half of next year has deteriorated significantly, and the likelihood of a short-term recession has increased due to significant and widespread tightening of financial conditions.