Will the upcoming Big4 report of technology stocks drive US stocks down?

category:Finance
 Will the upcoming Big4 report of technology stocks drive US stocks down?


The Fed is expected to be cautious about the economy

Recently released data showed that the U.S. economic recovery in June was better than expected. However, novel coronavirus pneumonia is coming back from late June, and high frequency data are alerting. As the virus spreads rapidly in the southern United States, the United States has suspended the plan many times, and the economic kinetic energy is weakening.

U.S. labor department data showed that the number of new jobless claims in the United States increased by more than 100000 month on month last week, ending the previous record of 15 consecutive weeks of decline.

First financial reporter noted that risk aversion once again allowed funds to flow back to the US bond market. The yield on 10-year US Treasury bonds fell 3.9 basis points to 0.589% last week, falling for the third consecutive week and hitting a two-month low at one time. The yield of 30-year US Treasury bonds fell 9.1 basis points, breaking the low since April. At the same time, the U.S. Treasury 22 issued 20-year U.S. debt has also been sought after by investors.

The grim economic situation has given the outside world hope for a new round of stimulus policy negotiations in the US Congress. However, the positions of the two parties are obviously different. Considering that the extra unemployment benefits of $600 in the cares act will soon expire, the income of more than 30 million Americans who lost their jobs due to the epidemic will be seriously impacted, which may further lead the US economy into the quagmire of recession u3002

Bob Schwartz, an economist at Oxford Institute of economics, said in an interview with first finance reporter that the impact of the epidemic is far from over. Since July, US economic activities are losing vitality, and the virus is hindering or even reversing the reopening of American enterprises and market demand. The rebound in jobless claims may signal another turning point in the recovery of the job market.

The Republican Party has delayed the release of the new fiscal stimulus bill. Schwartz believes that this will lead to the interruption of unemployment benefits and put many Americans at risk of shrinking income and consumer spending at the same time. However, he believed that under the severe economic situation, the two parties will actively seek consensus and strive to pass and implement a new round of stimulus plan as soon as possible.

The Federal Reserve will hold an interest rate meeting starting from the 28th. The market generally expects that the FOMC will not act at that time, and reiterated that it will keep interest rates close to zero in the future until they are convinced that the economy has passed the test of the epidemic and is expected to achieve the goal of maximum employment and price stability.

U.S. stock market to see big four

Uncertainty about factors such as the epidemic is making investors increasingly uneasy. According to data from Bank of America worldwide, US stocks suffered a net outflow of $3.8 billion last week, compared with a net purchase of $24.5 billion in the bond market, the third largest weekly capital inflow record in history.

Boris Schlossberg, macro strategist at BK asset management, said in an interview with first finance reporter that investors worries about the economic outlook have become an important reason to suppress US stocks. The second quarter GDP data of the United States will be released. Considering that the United States is almost completely closed in most of the three months, the impact on the economy will be far greater than that of the financial crisis in 2008. He believes that if the final contraction rate exceeds 40%, it will have a huge impact on the US stock market.

After the start of the new US earnings season, technology stocks, which had previously performed strongly, continued to fall into turmoil. The information technology sector even became the worst performing sector among the 11 sectors in the S & P 500 index last week. Schlossberg told reporters that there are hidden dangers in the high trading heat of technology stocks, and that the unreasonable valuation level is also worthy of attention. Statistics show that the rise in technology stocks has pushed the industrys weight in the S & P 500 index to 27.5%, the highest point since the breakup of the Internet bubble in the early part of this century.

Amazon and Apples share prices have risen by more than 40% this year, while Googles parent company alphabet and Facebook have risen more than 10% in the same period, which together have become the driving force behind the Nasdaqs 26 record high in the year. The four companies will release their financial reports this week. Christopher Harvey, a senior analyst at Wells Fargo, pointed out that with the sharp rise in technology stocks in the stock market, this kind of financing behavior may undermine the stability of the market and cause violent fluctuations.

The question for investors and the technology industry is, if the epidemic continues, can these companies continue to show earnings and revenue levels that support valuation, and how can subsequent growth in performance be guaranteed? Netflixs outlook for the third quarter has sounded the alarm. The huge growth of profits in the first half of the year may mean a slowdown in the second half of the year. The original content originally scheduled to be launched at the beginning of next year may be delayed due to production suspension, which also causes the market value of the company to evaporate by $15 billion in a single day after the release of the financial report. For US stocks and Nasdaq, if the performance of several star technology stocks is better than expected, the market is still expected to usher in a new round of upward trend. However, the huge market value of each company also means that once the performance is obviously negative, investors selling may lead the market into a new round of turbulence. Gundlach, the founder of double line capital and JeffreyGundlach, warned last week that technology stocks were strong and retail buying was a typical bear market rally, feeling the same as before the dotcom bubble burst. But the situation is worse because the Fed has no capacity to cut interest rates further and has used almost all available policy tools. Source of this article: Guo Chenqi, editor in charge of first finance and Economics_ NBJ9931

The question for investors and the technology industry is, if the epidemic continues, can these companies continue to show earnings and revenue levels that support valuation, and how can subsequent growth in performance be guaranteed? Netflixs outlook for the third quarter has sounded the alarm. The huge growth of profits in the first half of the year may mean a slowdown in the second half of the year. The original content originally scheduled to be launched at the beginning of next year may be delayed due to production suspension, which also causes the market value of the company to evaporate by $15 billion in a single day after the release of the financial report.

For US stocks and Nasdaq, if the performance of several star technology stocks is better than expected, the market is still expected to usher in a new round of upward trend. However, the huge market value of each company also means that once the performance is obviously negative, investors selling may lead the market into a new round of turbulence. Gundlach, the founder of double line capital and JeffreyGundlach, warned last week that technology stocks were strong and retail buying was a typical bear market rally, feeling the same as before the dotcom bubble burst. But the situation is worse because the Fed has no capacity to cut interest rates further and has used almost all available policy tools.