Key takeaways:

• Australian CPI and US PCE data to highlight inflation-fighting progress

• Cloud growth is expected to be a focal point for mega-tech earnings

A shortened week of trading will be headlined by mega-tech earnings in the US, as well as inflation readings both home and abroad that will renew the focus on interest rates.

Economic Calendar and News

Fresh inflation readings this week will be pivotal to the next monetary policy decisions for central banks at home and in the US.

On Wednesday, the Australian Bureau of Statistics will release its March quarterly inflation reading, with the Reserve Bank of Australia set to put the number under the microscope ahead of its upcoming Board meeting at the start of May.

Ever since strong job numbers were published a week or so ago, economists have increased their bets for a rate hike next month, albeit the majority view still favours another RBA pause. Nonetheless, if this week inflation data comes in worse than expected, it could put pressure on the RBA to resume its rate hike campaign.

Forecasts suggest Australian CPI for the March quarter slowed to 6.9% versus a year ago, with consumer prices edging higher by 1.3% across the quarter. In terms of the trimmed mean data, analysts are looking at a reading of 6.7% year-over-year, or 1.4% quarter-over-quarter.In the US, We'll receive a key update on inflation courtesy of March Personal Consumption Expenditures (PCE) Price Index, which is the Federal Reserve preferred gauge for inflation. According to consensus numbers, prices likely rose 0.3% last month, which would be in line with the growth seen in February. On an annual basis, that likely translates to growth of 4.5%, the slowest in nearly two years. Core pricing activity is tipped to have risen by the same amounts.Meanwhile, the Bureau of Economic Analysis (BEA) will issue an advance estimate for first-quarter GDP on Thursday, US-time. According to market estimates, the US economy likely grew at an annual rate of 2% during the first quarter of the year, down from 2.6% in the final quarter of 2022. Elsewhere, home price figures, as well as new and pending home sales will provide some insights on the US housing market.

Stocks on watch

It is big tech opportunity to make a statement over the coming days, with a host of household large-cap names set to hand down earnings. This includes the likes of Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOGL), Meta Platforms (NASDAQ: META), and Amazon (NASDAQ: AMZN).

Investors have been monitoring the economic outlook closely with the knowledge that if conditions deteriorate further, it could put pressure on these high-growth companies. That is because these names are particularly leveraged to business spending across areas like advertising and cloud infrastructure.

Microsoft Cloud division is arguably the watch-point for the broader sector, as it has been the growth engine for the tech giant, and the rest of its peers, over recent times. The company cloud services revenue grew by 18% during the last quarter, well ahead of overall growth of 2%. 

Although management has forecast the Cloud segment to grow at a similar pace in the upcoming report, the company Azure segment is reportedly set to decline by four or five percentage points quarter-over-quarter to around 30%, versus growth of 46% this time last year.

The oil majors will also be on show as the likes of Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) deliver their quarterly reports. More banks are set to release numbers as well, which means investors won'thave a complete picture as to the health of the global banking sector until the week end. UBS (NYSE: UBS), Barclays (NYSE: BCS), HSBC (NYSE: HSBC), and Deutsche Bank (NYSE: DB) are among those with earnings coming up. The name that might catch Selfwealth members interest, at least based on the surge in popularity for the stock last month, is First Republic (NYSE: FRC). With its results due before the open on Monday US-time, attention will be centred on the bank deposit book, which follows the failure of Silicon Valley Bank in March. First Republic was able to access liquidity via the Federal Reserve and a host of tier one banks, albeit analysts expect the bank earnings to have fallen amid slowing loan growth.There are also reports on the way from Coca-Cola Company (NYSE: KO), McDonald (NYSE: MCD), Visa (NYSE: V), Mastercard (NYSE: MA), Boeing (NYSE: BA), 3M (NYSE: MMM), Merck (NYSE: MRK), and Intel (NASDAQ: INTC), among others.Roughly a month after it was the subject of a takeover bid, funeral operator InvoCare (ASX: IVC) will be in the spotlight at the start of the new week after its suitor walked away from the proposed deal. 

With InvoCare Board effectively dismissing the offer, private equity group TPG has rescinded its $1.8 billion proposal following difficulties between the two parties striking a deal for access to due diligence, and a lack of progress in trying to bridge the gap between the two company expectations. At the time of its bid, the offer price featured a 41% premium.

Investors may continue to monitor lithium stocks after emerging news late last week that the government in Chile, the world second largest lithium producer, is seeking to push state ownership right across the sector. 

Via a public company, the state will hold a controlling interest in all lithium projects run by private miners, which led to massive share price declines for major players like Sociedad Quimica y Minera de Chile (NYSE: SQM) and Albemarle (NYSE: ALB). Shareholders will be cognisant that resource nationalisation has spread throughout South America, and there may be some concern if governments push for even greater control.Last but not least, iron ore miner Fortescue Metals Group (ASX: FMG) is in the news this morning after releasing its March quarterly production report. During the quarter, iron ore shipments reached 46.3 million tonnes, with an average revenue of US$109 per dry metric tonne. That volume was down on the preceding quarter, to the tune of 3.1 million tonnes. Unit costs rose 2% versus the most recent half to US$17.73 per wet metric tonne, with net debt of US$2.1 billion at the end of March. The miner has left its forward guidance for FY23  unchanged, albeit C1 costs are expected to be at the lower end of the range.