almost 4 years ago • 2 mins
Roll up, roll up, ladies and gentlemen: companies representing a third of the US stock market’s value will tell investors this week how they performed last quarter – but it’ll be tech firms taking center stage 🎭
Investors are expecting US companies’ first-quarter revenues to be much the same on average as they were last year, and profits to be 7% lower. And while coronavirus is behind a lot of the decline, it’s also responsible for some industries performing better than the rest: namely tech, which, alongside healthcare and consumer staples, is expected to report rising quarterly profits.
Last week, investors heard that Netflix scored an expectation-busting 16 million new subscribers as folks stayed home 📺 That same tailwind will probably help Amazon and Microsoft, whose retail business and productivity businesses respectively have benefited from an increase in online shopping and remote working. And while Facebook and Google-parent Alphabet will be hurt by less advertising, some analysts still think they’ll end up earning more than they did last year.
Weighing in at over 20% of the US stock market – which in turn represents about half the global stock market 🌎 – tech stocks have the potential to significantly influence its overall direction and, no matter where you’re based, your investments. So even the most passive investors among you, with cash sitting in a robo-advisor or pension pot, might find your investments’ values affected by tech earnings this week.
A recent Goldman Sachs report noted that the biggest five companies (four of which are tech) now represent a larger share of the US stock market than ever in recent history. That suggests the stock market’s recent recovery hasn’t actually been driven by as many companies as you’d expect after a dramatic selloff like the one in March – and that tech stocks may single-handedly be propping things up.
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.