- Alphabet and Tesla to kick-start ‘Magnificent Seven’ reports
- Bull market ‘broadening not rotating’ say analysts
- Investors spooked recently by semiconductor restriction comments
US quarterly earnings will hit top gear this week and investors should be watching closely. Will big tech corporate results put a stopper in the recent stock price declines that have cooled this year’s US markets rally?
The S&P 500’s technology sector has dropped nearly 6% in just over a week as growing expectations of interest rate cuts and a second Donald Trump presidency draw money away from this year’s winners and into sectors that have languished in 2024.
Analysts note that the aggregate forward earnings for S&P 500 companies have reached new record highs this year, signalling strong performance. Calendar second-quarter earnings could help tech reclaim the spotlight.
‘A recent tech sell-off was largely influenced by the Biden administration’s warning about potential restrictions on semiconductor chip sales to China, and former President Donald Trump’s comments that Taiwan should pay the US for protection considering the success of its semiconductor industry’, said analysts at Yardeni Associates.
They believe this year’s bull market is broadening rather than rotating out of tech.
BIG TECH KICKS-OFF
Tesla (TSLA:NASDAQ) and Google-parent Alphabet (GOOG:NASDAQ) both report after-hours on Tuesday (23 Jul), kicking off results from the ‘Magnificent Seven’ group of stocks that have propelled markets since early 2023. They’ll be joined by IBM (IBM:NYSE) and ServiceNow (NOW:NYSE) (both 24 Jul), while Texas Instruments (TXN:NASDAQ) (23 Jul) and Qualcomm (QCOM:NASDAQ) (24 Jul) will reveal data from the chips space.
Elsewhere, Visa (V:NYSE), Coca-Cola (KO:NYSE), Lockheed Martin (LMT:NYSE), Ford (F:NYSE) and General Motors (GM:NYSE) are among some of the other big-name companies set to report during the coming week, with investors keen to hear companies’ insights on how strong the consumer is and how is the outlook for future economic growth.
