The Week on Wall St<\/p>\n
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Well. US sharemarkets just continue to casually edge further into record highs.<\/p>\n
If US tech stocks were expected to underperform this year \u2013 having splurged without remorse from their late 2022 lows \u2013 well, there have been no signs of an impending comeuppance just yet.<\/p>\n
But it\u2019s a big week on Wall Street and these coming few days will be a major test of whether the Magnificent 7 can justify their Mega Tech titles.<\/a><\/p>\n Already this week, a laconic S&P500 clocked a fresh record high, as did the Best of Tech index, the Nasdaq 100 both indices boosted late by the US Treasury\u2019s move to cut quarterly borrowing by a lazy US$55 billion to $760 billion in the first quarter.<\/p>\n Optimism of the slightly cautious kind pervades US markets which are looking out for a string of really big signals this week in the form of Wednesday\u2019s headline US Fed\u2019s interest rate call and the various big tech earnings calls which could do all sorts of funny things to Wall Street\u2019s record\u2011breaking rallies.<\/p>\n Aside from Non-Farm Payrolls and the FOMC meet, US Q4 earnings is about to explode into life.<\/p>\n Enter Messrs Pfizer, Alphabet, Starbucks, AMD, Microsoft, Mastercard, Boeing, Qualcomm, Meta, Apple, Amazon as well as Exxon and Chevron Corp, among many others.<\/p>\n \u00a0<\/p>\n Wall Street just enjoyed a third week of gains and although the major indices ended Friday mixed, the overriding mood is still positive amid the recent AI-driven optimism.<\/p>\n Out front again was new king on the block, Microsoft, which reclaimed the title of Wall Street\u2019s most valuable company as its share price rose to all-time highs and its market cap exceeded $3 trillion. Via Nasdaq<\/em><\/p>\n \u00a0<\/p>\n Kyle Rodda at Capital.com says the milestone comes as investors back the company as the market\u2019s leader in artificial intelligence, courtesy (in large part) due to its acquisition of a significant share of OpenAI.<\/p>\n \u201cInvestors will watch Microsoft\u2019s Q2 results for signs that it is executing its AI strategy and monetising the hype surrounding the burgeoning technology. Analysts forecast a nearly 20% rise in EPS from a year earlier to $2.77 per share on a lift in revenues to US$61.12 billion.\u201d<\/p>\n But with four other equally monstrous tech names unwrapping some US$10 trn in earnings between Tuesday and Thursday, XM CEO Australia Peter McGuire says those bullish bets will be put to the test.<\/p>\n Microsoft and Alphabet set to report their results tonight, followed by Apple, Meta and Amazon on Thursday.<\/p>\n \u201cA cautiously risk-on tone ahead of a very busy week for the markets that\u2019s expected to get heated up mid-week by the Fed\u2019s policy decision, culminating with the latest payrolls report on Friday.<\/p>\n \u201cAfter a week of yet more upbeat economic indicators out of the United States, the soft landing narrative remained intact as the inflation data went in the opposite direction.\u201d<\/p>\n The bigger-than-expected drop in core PCE on Friday underscores the view that US price pressures are cooling, McGuire told Stockhead.<\/em><\/p>\n \u201c<\/em>Paving the way for a rate cut sometime in the spring.\u201d<\/p>\n \u201cBut investors remain split as to the likelihood of the Fed chopping 25 basis points off the Fed funds rate as early as March, so the focus for the January meeting is entirely on what clues the FOMC statement and Powell\u2019s commentary will offer on the timing.\u201d<\/p>\n So far, the data has been moving in policymakers\u2019 direction.<\/p>\n \u201cThe Fed has to tread carefully as the labour market is still churning out jobs at a solid pace. Chair Powell risks getting investors\u2019 hopes up by not reining in expectations, only for them to be dashed if Friday\u2019s jobs report surprises to the upside again.\u201d<\/p>\n On the corporate front, Netflix shares surged almost 20% last week<\/span> after the streamer smashed forecasts by adding new revenue to its flood of businesses with live streaming and ad-revenue gaining traction as it delivered its best quarter of growth since the pandemic.<\/p>\n Meanwhile, Air BnB (ABNB) stock surged 6% on Friday after the company announced it\u2019ll increase guest service fees for cross-currency bookings.<\/p>\n Starting April 1, guest service fees for bookings paid in a currency different from the listing will increase by as much as 2%, with total guest service fees increasing from less than 14.2% to up to 16.5%.<\/p>\n JPMorgan believe that the new cross-currency fee could lift 2024 & 2025 revenue by ~2% & EBITDA by ~4%-6%, which the punters have taken note of.<\/p>\n Finally, the former US President Donald Trump smoked the former South Carolina Gov. Nikki Haley in Tuesday\u2019s New Hampshire primary, moving the great orange fiend an infamy closer to a general election reshowdowndeathmatch with former young person, the incucumbent President Joe Biden.<\/p>\n The ex-president secured 47.3% of the vote, according to exit polls via Real Clear Polling.<\/p>\n \u00a0<\/p>\n I don\u2019t see why this needs Elsplaining:<\/p>\n Inner demons can be helpful pic.twitter.com\/EcOlXdGbRU<\/a><\/p>\n \u2014 Elon Musk (@elonmusk) January 28, 2024<\/a><\/p>\n\n \u00a0<\/p>\n This however, probably needs more\u00a0 Elsplaining than I can possibly unearth:<\/p>\n \u00a0<\/p>\n The first human received an implant from @Neuralink<\/a> yesterday and is recovering well.<\/p>\n Initial results show promising neuron spike detection.<\/p>\n \u2014 Elon Musk (@elonmusk) January 29, 2024<\/a><\/p>\n\n Elon\u2019s Tesla (TSLA) meanwhile, is likely to generate plenty of noise once again this week as investors and analysts weigh the premium valuation in light of the lowered unit volume expectations.<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n Five Mega Tech stocks boasting a combined market cap of more than US$10 trillion will report earnings this week. All eyes are on Microsoft, Alphabet, Meta Platforms, Amazon and Apple which are on deck between Tuesday and Thursday.<\/p>\n \u00a0<\/p>\n Tuesday<\/strong><\/p>\n General Motors (NYSE:GM), United Parcel Service (UPS), Sysco (SYY), Pfizer (PFE), Alphabet (GOOG), Microsoft (MSFT)<\/em>, Starbucks (SBUX), Mondelez International (MDLZ), and Advanced Micro Devices (AMD).<\/p>\n \u00a0<\/p>\n Wednesday<\/strong><\/p>\n Phillips 66 (PSX), Boeing (BA), Mastercard (MA), MetLife (MET), Qualcomm (QCOM), and Boeing (BA).<\/p>\n \u00a0<\/p>\n Thursday<\/strong><\/p>\n Merck (MRK), Honeywell (HON), Altria (MO), Amazon (AMZN), Apple (AAPL), Meta Platforms (META)<\/em>, Royal Caribbean Cruises (RCL), and Post Holdings (POST).<\/p>\n \u00a0<\/p>\n Friday<\/strong><\/p>\n Exxon Mobil (XOM), Chevron (CVX), AbbVie (ABBV), and Charter Communications (CHTR).<\/p>\n \u00a0<\/p>\n deVere Group CEO Nigel Green says investors this week will be looking for the best buy cues for artificial intelligence (AI) technologies.<\/p>\n \u201cThe S&P 500 index is pushing further into record territory, and this is mostly down to the tech titans,\u201d Green says. \u201cThese megacaps were also the drivers of most of the index\u2019s 24% gain in 2023.\u201d<\/p>\n \u201cThis reporting season for these five major tech companies holds immense significance for investors as their performance not only influences sector-specific trends but also serves as a bellwether for broader market and economic sentiment.\u201d<\/p>\n \u00a0<\/p>\n Here\u2019s 5 reasons why Green reckons this week is when earnings go \u201ccritical\u201d\u00a0 for Big Tech.<\/em><\/p>\n \u00a0 \u00a01. Market barometers<\/strong><\/em><\/p>\n \u201cThe combined market value of these five tech behemoths is a staggering reflection of their influence on the broader market. Investors often view these companies as barometers for the health of the technology sector and, by extension, the overall economy. A strong earnings performance from these giants can provide a positive sentiment boost to the entire market, while any signs of weakness may lead to increased market volatility.\u201d<\/p>\n \u00a0 2. Leadership in the S&P 500<\/strong><\/em><\/p>\n \u201cThe rally in the stock market last year was notably fuelled by megacap tech stocks. As investors continue to place significant emphasis on the potential of AI services offered by these tech giants, their earnings reports will be scrutinised for insights into the sustainability of this leadership and its impact on wider market trends.\u201d<\/p>\n \u00a0 3. Tech\u2019s role in economic growth<\/strong><\/em><\/p>\n \u201cThe tech sector is now a linchpin in driving economic growth. The reliance on digital services, cloud computing, and e-commerce has surged, and these companies are at the forefront of these trends. A strong earnings season from tech leaders would signal a continuation of the sector\u2019s pivotal role in supporting economic growth, influencing investor confidence,\u201d noted the deVere CEO.<\/p>\n \u00a0 4. AI and innovation<\/strong><\/em><\/p>\n Green explains: \u201cInvestors are excited by the promises and possibilities of artificial intelligence (AI) services. Companies like Microsoft, Alphabet, and Nvidia have been leading the charge in AI innovation, and their earnings reports will be closely monitored for updates on advancements, partnerships, and commercialization of AI technologies. Positive signals in this regard will drive enthusiasm among investors looking for exposure to cutting-edge technologies.\u201d<\/p>\n \u00a0 5. Consumer behaviour and e-commerce<\/strong><\/em><\/p>\n \u201cAmazon and Apple, in particular, are closely tied to consumer behaviour and spending patterns. Amazon\u2019s performance is a key indicator of the strength of e-commerce, while Apple\u2019s earnings shed light on consumer demand for tech products. As these companies navigate global challenges and evolving consumer preferences, their earnings reports provide valuable insights into economic trends and potential shifts in consumer behaviour.\u201d<\/p>\n \u00a0<\/p>\n Non-farm Payrolls drop on Friday night, which could see the US\u00a0 make a small shift either way on the date for a first Fed rate cut \u2013 currently fully priced in for May.<\/p>\n \u00a0<\/p>\n TUESDAY<\/strong> \u00a0<\/p>\n WEDNESDAY<\/strong> \u00a0<\/p>\n THURSDAY<\/strong> \u00a0<\/p>\n FRIDAY<\/strong> \u00a0<\/p>\n \n<\/span><\/p>\n The post TECH HEAVY: Time to call in $10 trillion of Mega Tech earnings in the next 72 hours<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"Artificial Optimism?<\/h2>\n
\n\u00a0<\/p>\nMicrosoft Projected (EPS)<\/h2>\n
Elon Watch<\/h2>\n
US Earnings<\/h2>\n
Tuesday January 30 \u2013 Friday February 2<\/h2>\n
5 ways this all might go sideways<\/h2>\n
The Economic Calendar<\/h2>\n
Monday January 29 \u2013 Friday February 2<\/h2>\n
\nJapan Unemployment Rate (Dec)
\nEurozone GDP (Q4, flash)
\nEurozone Economic Sentiment (Jan)
\nMexico GDP (Q4, prelim)
\nUnited States S&P\/Case-Shiller Home Prices (Nov)
\nUnited States JOLTs Job Opening (Dec)
\nUnited States CB Consumer Confidence (Jan)<\/p>\n
\nJapan BoJ Summary of Opinions (Jan)
\nChina (Mainland) NBS PMI (Jan)
\nJapan Consumer Confidence (Jan)
\nGermany Retail Sales (Dec)
\nGermany GDP (Q4, flash)
\nUnited States ADP Employment Change (Jan)
\nUnited States Fed FOMC Interest Rate Decision
\nBrazil BCB Interest Rate Decision<\/p>\n
\nWorldwide Manufacturing PMIs, incl. global PMI (Jan)
\nSouth Korea Trade (Jan)
\nEurozone Unemployment Rate (Dec)
\nUnited Kingdom BoE Interest Rate Decision
\nUnited States ISM Manufacturing PMI (Jan)<\/p>\n
\nSouth Korea Inflation (Jan)
\nFrance Industrial Production (Dec)
\nUnited States Non-farm Payrolls, Average Hourly Earnings,
\nUS Unemployment Rate (Jan)
\nUnited States UoM Sentiment (Jan, final)
\nUnited States Factory Orders (Dec)<\/p>\n