2024-04-21 08:00:00
Both are members of the “Magnificent Seven,” seven very large stocks that contributed to the rise of the S&P 500 index last year.
Many stakeholders believe that the performance of each company is particularly important for the future of the market. The S&P 500 has fallen in recent weeks, nearly halving its year-to-date gain to 5%. Indeed, persistent inflation is dampening expectations of a cut in U.S. interest rates by the end of this year.
Months of high stock prices have made indexes relatively expensive, and a disappointing earnings report might erase the reason investors hold these stocks.
“Psychologically, it’s important to exceed expectations,” said David Katz, chief investment officer at Matrix Asset Advisors. “A lot of these companies have a lot of good news.”
Also in focus is the Personal Consumption Expenditures (PCE) Price Index, which will be released on the 26th of this month ahead of the April 30-May 1 meeting of the Federal Open Market Committee (FOMC). As of Tuesday evening, the federal funds rate futures market was pricing in a rate cut of less than 40 basis points (bps) by the end of the year, according to LSEG data. At the start of 2024, it was 150 bps.
Reuters Charts
Tesla is expected to announce its financial results on the 23rd, Meta on the 24th and Alphabet and Microsoft on the 25th.
As of the 8th of this month, UBS strategists estimated that six companies, excluding Tesla, whose stock prices have fallen regarding 40% since the start of this year due to concerns regarding the vehicle sector electric (EV), had made a total profit of 4.22. % in the first quarter ．An increase of 1% was expected.
Except for the Magnificent Seven, all S&P 500 companies have reported negative year-over-year profits over the past four quarters, underscoring the group’s importance in the market, according to JPMorgan analysts.
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