Will Amazon, Apple, and Alphabet save the day?
- Underwhelming earnings season so far
- Tech heavyweights like Amazon, Apple, and Alphabet yet to report
- 70% of reported earnings per share topped expectations
- Upside surprises have yielded muted reactions
- Financials pointing to strength from consumers
- Full-year earnings-per-share estimates for S&P 500 slipping
- S&P 500 up despite decline in expected earnings per share
- Big tech expected to drive earnings growth
- Tech sector outperforming and preferred by investors
The current earnings season has been underwhelming so far, with lackluster numbers from various companies. However, the disappointing results do not indicate a decline in consumer demand or threaten the stock market rally. The good news is that tech heavyweights like Amazon, Apple, and Alphabet are yet to report their fourth-quarter results, and they are expected to drive earnings growth. Despite slightly below historical trends, around 70% of reported earnings per share have exceeded expectations. However, these upside surprises have not resulted in significant market reactions. Financials have been pointing to ongoing strength from consumers, even with inflation remaining high. High-end buyers are faring better than the low end, which is positive for the economy heavily reliant on consumer spending. Full-year earnings-per-share estimates for the S&P 500 have slipped since the start of the year, but it is still early in the reporting season. The broader U.S. equity market is performing better than expected based on the results so far. Investors should not be too concerned as even if S&P 500 earnings fall, it would still be a new record high for the index. Big tech companies have the potential to save the day, as they have done in the past. The expected fourth-quarter earnings growth for tech giants like Amazon, Apple, Alphabet, Meta, Microsoft, and Nvidia is significantly higher compared to other S&P 500 components. Without these tech giants, the index’s earnings would be down year over year. Tech sector outperforms in slow-growth economies, and investors continue to prefer it over other sectors. The Nasdaq Composite is leading the way once again this year, reflecting investor confidence in the tech sector.
Public Companies: Amazon.com (AMZN), Apple (AAPL), Alphabet (GOOGL), Microsoft (MSFT), JPMorgan Chase (JPM), Goldman Sachs Group (GS), Visa (V), American Express (AXP), Nike (NKE), Constellation Brands (STZ), Meta (META), Nvidia (NVDA), Tesla (TSLA)
Private Companies:
Key People: Lori Calvasina (RBC Capital Markets Head of U.S. Equity Strategy), Christopher Harvey (Wells Fargo’s Head of Equity Strategy), Nicholas Colas (DataTrek Research co-founder)
Factuality Level: 7
Justification: The article provides information about the current earnings season and the performance of different sectors and companies. It includes quotes from experts and data from research firms. However, there is some speculation and opinion presented as fact, such as the statement that big tech may save the day and the preference for the tech sector.
Noise Level: 4
Justification: The article provides a brief overview of the current earnings season and the performance of tech companies. It mentions some trends and observations from the reports but lacks in-depth analysis or actionable insights. The article also includes some irrelevant information about consumer spending and the stock market. Overall, the article contains some noise and filler content.
Financial Relevance: Yes
Financial Markets Impacted: The article discusses the underwhelming earnings season and the potential impact of big tech companies such as Amazon, Apple, and Alphabet reporting their earnings this week. It also mentions the performance of financial companies like JPMorgan Chase and Goldman Sachs Group.
Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article primarily focuses on financial topics, specifically the earnings season and the performance of tech and financial companies. There is no mention of any extreme events.
www.marketwatch.com 
