Big technology stocks may surprise to the upside when they report results in coming days. But even a better-than-expected quarter and companies’ improved earnings and revenue forecasts may not be enough to save the market from its recent reversal, according to some professional investors. “They really need to show up and prove themselves,” said Adam Sarhan, CEO of 50 Park Investments, noting that all the ingredients look ripe for a pullback. “The market needs some kind of rescue; it needs some kind of bullish catalyst … because there’s a tremendous amount of weakness.” Monday kicked off one of the busiest earnings weeks of the third quarter season in what’s slated to be a critical week for Big Tech, with results from four major players on deck. Tesla and Netflix unofficially launched the earnings period for the sector last week. That continues Tuesday with results from Alphabet and Microsoft , followed by Meta Platforms on Wednesday and Amazon Thursday, all after the market closes. MSFT YTD mountain Microsoft shares year to date The reports from the technology titans come at a tricky time for the broader stock market, and investor sentiment. For the better part of 2023, tech stocks rallied as investors shifted back toward companies growing the fastest, bet on the excitement around artificial intelligence and bond yields promised to pull back. The stocks that are often referred to as the “Magnificent Seven” dominated most of the market’s gains earlier in the year and propelled the broad indexes higher. That narrative shifted in recent weeks as bond yields reversed course and the Federal Reserve fanned fears of a higher-for-longer interest rate environment — even opening the door to another hike before year end. After a rocky September, third quarter earnings mark the next key test for these companies that make up more than a quarter of the S & P 500, setting the tone for the entire season and where the market finishes the year. The earnings setup Heading into…
2023-10-24 12:19:00
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