4 months ago • 1 min
As earnings weeks go, this one’s a behemoth. Companies with a combined market value of $27 trillion are set to report results, and that’ll likely make for some pivotal days in stocks. After all, the rally in the US stock market (the S&P 500’s up an impressive 19% so far this year) means there’s a lot of (AI-fueled) hope baked into share prices. And just as a balloon gets more vulnerable the more it’s pumped up, stocks become more open to taking a tumble the higher their expectations rise.
Effectively, that means the choice for companies is to either deliver big or spark a mass exit – as both Netflix and Tesla proved last week when their disappointing results triggered a wider $400 billion selloff in the Nasdaq in a single day.
Thing is, given where the market is right now – the S&P 500’s valuation is looking fairly pricey – investors have become harder to impress. Case in point: S&P 500 earnings have beaten estimates at an above-average rate so far, but only 42% of the stocks had positive reactions after the fact. So the prospect of any big upside from here would seem to be limited. Mind you, that could all change with a Big Tech giant coming in and smashing expectations. But, until that happens, you might want to take a more cautious approach to this market. And that means staying invested for the long term in companies you believe in across sectors, but also perhaps waiting to see the lay of the land before plowing any more cash into stocks.
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.
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