Marketbites: Busy Week for Big Tech Earnings
Portfolio Manager Commentary:
The Nasdaq Composite slipped on Monday as investors awaited the release of a slew of corporate earnings reports this week from big tech companies and fresh economic data. Some mega-cap technology companies are reporting their first quarter earnings this week including Alphabet, Meta, Microsoft, and Amazon. “Everyone’s just waiting for tech earnings,” said Chris Harvey, head of equity strategy at Wells Fargo Securities. “This is a very, very busy week for earnings, so we’re just treading water.” A lot of good news is already priced into tech stocks so it may be difficult for tech stocks to rally on the back of financial reports.
Roughly 76% of S&P 500 companies that have reported earnings through Monday morning beat analyst earnings estimates, according to FactSet data. Investors are also keeping a close eye on new economic data that will provide insight into whether inflation is cooling and if the Federal Reserve will announce another rate hike at its next meeting in early May. GDP numbers for the first quarter and April’s consumer sentiment data are both among data points slated for release later in the week.
Chart of the Day:
Individual investors have poured money into single stocks and ETFs at a near-record clip in the first quarter of 2023. Individuals bought a net $77.7 billion in equities and ETFs on U.S. exchanges in the first three months of the year, according to Vanda Research data, which excludes contributions to 401(k)s and other retirement accounts. That sum trails only the first quarters of 2021 and 2022, when they bought about $80 billion. When individual investors’ stock purchases soared in the early days of the pandemic, many predicted the frenzy would die down once stimulus checks ran out and routines returned to normal. Instead, individuals have continued buying, at about five times the rate this year as in 2017 to 2019.
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