New York, July 23 (Reuters)-Wall Street rally faces new challenges next week, flooded with revenue reports from major US companies, including tech companies and Internet giants who have recently regained market leadership ing.
More than one-third of the S & P 500 are set to report quarterly results next week, headlined by Apple. (AAPL.O), Microsoft (MSFT.O),Amazon (AMZN.O) And Google’s parent alphabet (GOOGL.O), 4 major US companies in market value.
Walter Todd, Chief Investment Officer of Greenwood Capital, South Carolina, said:
“It’s a matter of fun. Can they live up to the expectations that stock prices will reflect?”
The strength of these large caps has rebounded in part after fears of a slowing US economic recovery have pushed the Treasury’s benchmark yields this week to their lowest levels since February.
As the COVID-19 delta spreads throughout the United States, the Federal Reserve Board of Governors’ meeting on Tuesday and Wednesday will focus on the economic outlook. policy.
The S & P 500 is at record levels after rising more than 95% from its March 2020 lows, but recent equities have risen in volatility as investors try to adjust bond market signals on their economic outlook. Withstands.
Indeed, on the surface, equity performance raises some questions about economic power. Growth stocks, which have been market leaders for years in a slump, surpassed economically sensitive value stocks in July. year 2000 (.RUT) So far this month it has fallen by more than 4%.
Timsky Enzilevsky, Investment Director of Aberdeen Standard Investments in Philadelphia, said:
The dominance of megacap stocks also raises concerns that the wider index may be more dependent on the fate of some giant tech companies.
Market capitalization of five companies: Apple, Microsoft, Amazon, Alphabet, Facebook (FB.O) -Recently, it has reached 24.6% of the market capitalization of the S & P 500. This is almost the highest percentage of market capitalization in 2021.
Less than half of S & P 500’s stock has recently traded above the 50-day moving average, even though the index is at or near the new highs. Compared to more than 90% in April, “What’s happening under the hood, according to investment strategist at market research firm AllStar Charts, Willie Delwiche, is a picture of strength drawn just by looking at the popular average. It’s incompatible. “
At the same time, bullish investors can mark a strong start to the earnings season, which is expected to show a strong recovery from the pandemic. According to Refinitiv IBES data, 120 S & P 500 companies have reported so far, and second-quarter revenue is expected to increase 78.1% from a year ago, up from 65.4% at the beginning of the month.
Other big names to report next week include Facebook (FB.O), Tesla (TSLA.O), Visa (VN), Exxon mobile (XOM.N) And Pfizer (PFE.N).. Concerned about the strength of the economy, investors will focus on the rest of the year and corporate expectations by 2022.
Anu Gaggar, Global Investment Strategist at Commonwealth Financial Network, said: It still reflects a healthy economic environment. “
Report by Luis Klauskov; edited by Ira Iosebashvili and Nick Zieminski
Our criteria: Thomson Reuters Trust Principles.
Wall Street Week Ahead Big Tech Companies Make Money With Taps To Regain Market Reins
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