Tech giants Apple, Amazon, Meta, Microsoft and Apple will release their accounts for the second quarter this week in a context of continued Fed rate hikes and rising inflation. The tech sector, one of the most penalized in the first half of the year, has been recovering in recent weeks with Apple and Amazon which have already recovered approximately 18 and 20% respectively from the lows touched in mid-June. Microsoft is also convinced with + 18.1% from the lows of 13 June.
Tomorrow we start with Alphabet and Microsoft
According to FactSet estimates about 175 S&P 500 companies will release their accounts this week including 12 members of the Dow Jones.
Alphabet, the parent company of Google, e Microsoft they will open the dance on Tuesday after the close of the markets, while the numbers of Meta Platforms, the parent company of Facebook are scheduled for release on Wednesday. Amazon and Apple publish the accounts on Thursday after the close of the markets.
Other companies beyond big tech this week we will see numbers from other Wall Street giants like Ford Motor, General Motors, Coca Cola Hershey. Investors’ focus will remain on how companies have navigated this quarter filled with market volatility, supply chain problems and rising inflation and a strong dollar.
“We see inflation deeply rooted in the economy”he said last week in an interview David Solomon, CEO of Goldman Sachs. Goldman Sachs number one also added that inflation projections are mixed and uncertain.
Big tech quarterly, analysts’ expectations
According to FactSet analysts, Alphabet e Meta Platforms will present accounts with sharply lower profits for the second quarter of the year compared to a year ago.
With regard to Microsoft instead (which publishes the accounts for the fourth quarter tax Tuesday) expectations are for an increase in profits by 5% a 17,29 billions of dollars compared to a year ago. In June, the company cut its forecast for the next quarter citing the negative impact of the strong dollar.
While Apple again according to analysts of FactSet, this Thursday will record a decline in profits of 13% a 18,81 billions of dollars. Amazon the e-commerce and cloud computing giant will be particularly noted as it posted its first quarterly loss in seven years in the first quarter of the year, due to declining online shopping and rising product costs. Investors will try to understand how the company is driving in this particularly difficult time for multiple reasons, the new CEO Andy Jassy, which has held back Amazon’s aggressive expansion under the long leadership of Jeff Bezos.
Towards the weakest quarter since the end of 2020
For the moment, about 20% of the companies of the S&P 500 have published the accounts and the results have been mostly disappointing, despite some positive surprises with numbers above expectations. All in all, according to FactSet analysts, company profits are expected to grow by 4.8%, which would be the slowest growth since the last quarter of 2020. Revenue growth is expected to be 10.9%.
Beyond the tech accounts some companies this Tuesday McDonald’s publishes the accounts and they will be particularly observed as well as the accounts of the large distribution companies because they will offer a look at the health of consumers. Chevron ed Exxon they publish the accounts on Friday morning and according to FactSet analysts both will publish growing profits given the increase in crude oil since the beginning of the year. According to analysts, the two companies will be the two largest contributors to the S&P 500 for the second quarter in terms of profit growth.
In the meantime, we recall that Netflix, Snapchat and the social platform involved in legal battle with Elon Musk, Twitter have published particularly mixed accounts. Netflix posted fewer-than-expected subscriber losses for the second quarter in a row while social platforms Snap and Twitter reported a tough time for their profits and revenues due to their customers’ reduced advertising spending.