Big Tech Under Scrutiny: What’s Next for the Markets?

High Hopes for Tech Giants’ Earnings Reports

In Asian markets today, all eyes are on Hong Kong, which is up by over 1% following Wall Street’s recovery from a $2 trillion selloff.
The optimism stems from the upcoming earnings announcements of major tech leaders scheduled for this week.

Tech Companies Driving Market Performance

The tech companies have notably boosted Hong Kong indicators after UBS Group AG overweighted Chinese stocks, citing resilient profits despite the nation’s real estate and macroeconomic concerns.
Investors are eager to see if earnings will meet the high expectations for Artificial Intelligence this week, as about 180 companies – representing over 40% of the S&P 500 market value – will report their results.

The focus on earnings comes after a downturn fueled by geopolitical fears and indications that the Fed is in no rush to cut rates.
All eyes are on the Big Tech companies, with high anticipation surrounding their upcoming reports.

Wall Street’s Buzz Over Big Tech

On Wall Street last night, the shares of major tech companies outperformed in anticipation of this week’s quarterly results, propelling Nasdaq up by 1.1%.
While Nvidia gained 4.4%, Amazon.com rose by 1.5%, and Alphabet jumped by 1.4%.
However, Tesla’s prices dropped by 3.4% after slashing prices in its key markets.

Apple Inc.
was highlighted as one of the top picks for 2024 by Bank of America Corp.
due to optimism about its future results.
Despite positive expectations for upcoming earnings reports, there are lingering uncertainties surrounding the Fed’s next moves and the ongoing Middle East tensions according to Shane Oliver, AMP’s chief economist.

Tech giants like Tesla, Meta Platforms, Alphabet, and Microsoft are set to release their earnings reports this week.
However, UBS downgraded its rating on mega-cap companies on Monday, warning that the earnings growth momentum of tech stocks could “collapse” in the coming quarters.

Besides corporate earnings, markets are also awaiting this week’s release of the US Gross Domestic Product data and March’s Personal Consumption Expenditures data – the Fed’s preferred inflation gauge – to further assess the monetary policy trajectory.