Now that the latest FOMC meeting is behind us, equity markets are set to shift their attentions to the earnings due after US markets close on Thursday Feb 2nd out of these three tech giants: Apple, Alphabet, and Amazon.
And here’s something else they all have in common: each company has a market cap of more than one trillion US dollars!
With a combined market cap US$ 4.63 trillion, that accounts for nearly 13% of the S&P 500’s total market cap of US$ 35.939 trillion.
In other words, given the sheer heft of these three tech giants, the market’s reaction to these tech earnings should have a major influence on how the broader S&P 500 index performs when US markets reopen on Friday, February 3rd.
Here are the current forecasts for some key items in the respective earnings:
Key talking points range from Apple’s supply-chain issues in China and the US dollar’s impact on its earnings, to whether the mass layoffs at Amazon and Alphabet will help their respective financial standings over coming quarter.
With so much at stake, investors and traders will be looking for:
From a technical perspective, the S&P 500 has posted several bullish milestones (as marked in chart below)
(1) yesterday’s (Wednesday, Feb 1st) intraday prices punched to its highest levels since Sept.
(2) breached the upper boundary of its 2022 downtrend.
(3) formed a “golden cross” last week.
(4) Its 14-day RSI (relative strength index) has yet to hit the 70 line which officially marks “overbought” levels.
Such technical tell-tale signs suggest that this benchmark index (which measures how US stock markets have performed overall) has more room to chase immediate gains, especially now that the Fed has indeed downshifted its rate hikes.
Potential scenarios ahead:
If the earnings outlook is positive for these tech heavyweights, equity bulls (those hoping prices will move higher) will be gunning for the 4216.2 peak from late-August as the next target.
The tech-heavy index has indeed climbed 20.3% since the closing price on 28th December 2022, which was then a two-year low, meeting the criteria of a 20% climb from a recent low to mark a “bull market”.
30 March 11:27
Should markets increasingly expect an actual Fed rate cut in Q3 2023, or even an official pause on the Fed rate-hiking cycle at its next policy meeting in May (52% chance of such an occurrence), that should help the Nasdaq 100 officially lay claim to a bull market.
23 March 12:10
Governments and central banks across major economies are scrambling to limit the knock-on effects from the rapid collapse of Silicon Valley Bank (SVB), a key financier of the tech and startup ecosystem around the world.
13 March 11:19
However, this latest iteration is likely to succumb to fundamental drivers over the course of this month that are set to have a greater influence rather than technical signs.
9 March 11:56
At the time of writing, the futures contracts for the S&P 500 are extending February’s declines into this month. At the time of writing, the benchmark index for US stock markets has gone below the widely-watched 100-day and 200-day simple moving averages (SMA), having earlier already broken below the uptrend line from October’s trough.
2 March 11:05
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