New York (Reuters)-Next week’s major U.S. revenue report swarm, led by Apple (NASDAQ :), Microsoft (NASDAQ :), and Facebook (NASDAQ :), has recently been run by banks, followed by technology and growth stocks. It can help reaffirm your advantage. Potential beneficiaries of energy and other economic resumptions.
After leading the market for most of 2020, tech stocks lag behind so-called value or cyclic play at the end of last year. The business is expected to benefit most from the economic recovery promised by the vaccine against COVID-19.
This change has recently stagnated as investors weighed the poor outlook from major banks and the blockbuster quarterly report from Netflix (NASDAQ :) and raised their stake by 17%. The Russell 1000 growth index rose 3.3% last week as of Friday morning, but the corresponding value fell 1.5%.
Chuck Carlson, CEO of Horizon Investment, said next week’s fourth-quarter performance (about a quarter of the report) could help determine if growth stocks will continue to revive. Said that it could threaten the recent rise in value and circulating stocks. service.
“It’s probably about the profit season,” he said. “What does revenue mean in terms of the sustainability of this rotation that has occurred in the last eight or nine weeks?”
Investors have made tech stocks desirable because of their steady growth and resilience in the face of the coronavirus pandemic. Investors have poured money into this sector as widespread blockades have devastated the swath of the US economy.
However, the resumption of high-tech outperformance could reinstate concerns that investors are rushing to popular names. The five largest tech companies make up about 22% of the weight of the S & P 500.
With the exception of Apple and Microsoft, other technology companies to be reported next week include payment processing company Visa (NYSE :) and Mastercard (NYSE :) and semiconductor company Advanced Micro Devices (NASDAQ :). included. Tesla (NASDAQ :) reports Wednesday that its explosive stock price has transformed electric car makers into one of the most valuable companies in the world.
So far, corporate profits have been strong overall. Of the 66 S & P 500 companies that reported revenue, 87.9% exceeded Wall Street’s estimate, well above the long-term average of 65%, according to Refinitiv’s IBES data.
Investors are paying particular attention to the outlook for companies as the economy is expected to recover this year. According to Refinitiv, this year’s earnings are expected to increase by 23.7% after a 14.1% decrease in 2020.
Revenues in the technology sector remained relatively good in 2020, but expected profit growth in 2021 was 14%, below the overall S & P 500 and lagging behind areas such as finance, industry and materials. I will. “Risks are in a situation where we had a good 2020 to conclude with this report next week. What do we do for Angkor?” Said Walter Todd, Chief Investment Officer at Greenwood Capital.
Robert Pavlik, senior portfolio manager at Dakota Wealth Management, said the demand for Apple’s iPhone 12 will be a key issue for the company to report on Wednesday. Analysts expect the company to report a 13% increase in quarterly profits.
Kim Forrest, Chief Investment Officer at Bokeh Capital Partners, wants to know how well Microsoft is using telecommuting products. The software giant is expected to record a revenue increase of 8.7%.
Investors say Facebook is estimated to report a 25% increase in revenue, which could raise questions about the impact of the US elections on social media business and President Donald Trump’s ban on various platforms. That is.
The earnings season is overheating as the S & P 500 broke the record in 2021. Some investors say that next year’s corporate performance needs to justify a high stock valuation.
“Since October, stock prices have been strong and we have to question all the stories about potential market recessions, when they will come and what causes them,” said Public. “.
Tech stocks could regain control of the market as Reuters raises earnings
https://www.investing.com/news/stock-market-news/tech-shares-could-retake-market-reins-as-earnings-heat-up-2396515 Tech stocks could regain control of the market as Reuters raises earnings