The week ahead: Earnings will highlight big tech

Banks came first – weighing in on the state of the consumer, taking action on credit and debit spending.

And while things look pretty resilient and spending looks strong, at least for now, these banks have been building up notable reserves over the past quarter.

And through all of this, the great digital shift is taking place.

We’ve highlighted these trends in report coverage from banking giants like JPMorgan, Citigroup and others.

Also Read: Loan Loss Reserves Rise at Cautious Wells and Citi

And now it’s Big Tech’s turn.

Amazon: the pulse of e-commerce

Amazon’s earnings report on Thursday will provide insight into the state of the consumer — not just here but across the world — and the continued fortunes of e-commerce and the platforms that bring buyers and sellers together.

Prime Day is newly in the rearview mirror, so comments will focus on the stickiness of the subscription model. The company has raised its prices for the subscription itself, and we’ll see if that spurred significant churn. Supply chain and geopolitics didn’t weigh much on last quarter’s results, and we’ll see if that resilience continues to ring true.

There may be some illumination from the expansion of Amazon Fresh, where the most recent store count was 46. And Amazon Web Services offers a bit of a proxy for the connected economy, helping to usher in new applications and even the metaverse.

Apple: BNPL’s great ambitions

Management has generally been a little skewed about how Apple Pay is and how it fared. Recent research from PYMNTS has highlighted that Apple Pay has its own challenges, and all ears on Thursday’s earnings call will be tuned for a discussion of BNPL’s forays and how the strategy marketing of the company could bear fruit.

Apple, of course, has a big picture view of supply chain dynamics, and last quarter the pressures here hit sales up to $8 billion. We’ll see if Apple is able to continue making “all-time records” for the App Store as its pivot beyond a previous hardware focus toward greater traction in Services gains traction. As seen in the latest earnings report, the company now has 825 million paid subscriptions on the services platform, which represents a gain of 165 million over the previous 12 months – which to in turn helped increase revenue, overall, by 17% year over year. .

Alphabet (Google) spells out Google Pay traction

Apple’s results will have a seismic impact beyond its own numbers – and will impact platforms everywhere. There are already signs that ad markets are slowing, where Snap’s poor performance has been linked in part to privacy policy changes by Apple (and app and advertiser tracking, where consumers can simply withdraw). Google, of course, has worked to make Google Pay even more prominent as a digital payment method. Alphabet reports on Tuesday.

Last quarter, Alphabet CEO Sundar Pichai said, “Obviously we’ve been focused on making payments work well…our payments strategy is very similar to the strategy we have for commerce. We want to make all of this work easier, both on the merchant and financial institution side, and make sure they can communicate well with customers.” By the end of the first quarter, 150 million people in 40 countries were using Google Pay.

Visa and MasterCard

The payment network giants – Visa and Mastercard – will release their data on Tuesday and Thursday, respectively. In many spending categories, we exceeded 2019 levels, and investors will want to know how cross-border spending/travel held up. Credit has been more widely adopted by consumers, where, for Mastercard, gross dollar volume (GDV) paid by this method increased by 31%, outpacing debit at 1%.

Also Read: Mastercard X-Border Travel Spend Volumes Top Levels of 2019 Across the Globe

U.S. Visa payment volume grew 16% year-over-year in the last quarter, up 44% from 2019, management said. Chief Financial Officer Vasant Prabhu said domestic credit spend was up 27% and 35% from 2019 levels. B2B is a long-term opportunity as Visa Direct transactions increased by 20% .

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NEW PYMNTS SURVEY FINDS 3 IN 4 CONSUMERS HAVING HIGH DEMAND FOR SUPER APPS

About: Results from PYMNTS’ new study, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy,” a collaboration with PayPal, analyzed responses from 9,904 consumers in Australia, Germany, UK and USA. and showed strong demand for one super multi-functional app rather than using dozens of individual apps.

About Roberto Frank

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