US Market "So FAANG So Good" As Qtrly Earnings Cont'd ?
I have mentioned in my post dated Tue, 18 Apr (click here to read !), going forward US market performances during reporting season, will be influenced by listed companies’ earnings report.
Last week, was no exceptions especially on Thu, 20 Apr when $Tesla Motors(TSLA)$ Q1 2023 earnings failed to meet Wall street expectations - everything just dipped.
“Thankfully” market decided to take a “break” on Fri, 21 Apr (see above results); putting a brake on its past 4 days’ decline.
By the time market ended Fri’s trading, all 3 composite indexes were marginally higher (+0.07% to +0.11% gain).
GOOG & AMZN vs S&P 500 Index performance
Looking at above diagram, its “safe” to conclude that rally in Megacap growth & Technology stocks this year has buoyed US markets.
$Apple(AAPL)$ has gained +27% YTD; accounting for nearly a quarter of S&P 500 total advance thru Mar 2023. Incidentally S&P 500 index’s gain came in at +7.5% YTD.
Confidence has returned partly because investors “believed” that the Fed will pause its interest hike “soon” ?
However I strongly believed that there will be one more interest hike of 0.25% (in May).
Really no need to fret over it and we will know by next Wed, 03 May.
It would be too pre-mature to say that the US market will perform “better” this week because according to Refinitiv, comms services companies (eg. $Meta Platforms, Inc.(META)$ & $Alphabet(GOOG)$ ) are expected to post declines of -12%.
One of the main focus this week will be 3 of 5 FAANG stocks announcing their quarterly earnings.
They are (in time sequence)- Google, Meta Platform and $Amazon.com(AMZN)$.
Will they be able to put up a “good” showing despite (forecasted) weaker earnings results ?
Will investors take to heart the continual “downsizing” undertaken by the FAANG stocks to bolster margins ahead of a recession, making them “attractive” again in the process ?
What are the odds that the Fed will really pause interest hike after the coming May 2023 increase ?
No one knows; not even Fed themselves !
The only assurance is that if and only if official data continues to show that inflation is falling and at a “wider” percentage in Q2 and Q3 - only then will the glimmer of hope of a pause turns plausible.
Right now, its only a guessing game that retail investors like us could ill afford to second guess incorrectly and buy into stocks (even blue chips) at the “wrong” (& higher) price. Agree ?
Do you think the FAANG stocks’ quarterly earnings will help to lift the market up this week ?
Do you think you will add FAANG stock to your portfolio or add onto your existing holdings ?
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What else can we buy apart from FAANG? Hehe
My latest. Tks for reading my post.
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I will hold these stocks for long term anyway.
FAANG used to be really good but a little bit unsure at the moment.