Head of Equity Strategy
Summary: The Q1 earnings season is getting serious next week with earnings from Apple, Amazon, Microsoft, Alphabet, and Meta which not only be important for the overall equity market, but especially sentiment on technology stocks as preliminary data suggest that technology companies are seeing a less impact on margins compared to MSCI World. On Friday we get important earnings from Exxon Mobil and Chevron were hopefully both oil majors will increase their capex for 2022.
Can Nasdaq 100 solidify its minimal impact on margins?
The Q1 earnings season kicks into its highest gear next week with earnings releases from the major US technology/consumer companies with the heavyweights such as Microsoft, Alphabet, Visa, Meta, Apple and Amazon stealing the show. Outside the technology and consumer sectors, the Friday’s earnings releases from Exxon Mobil and Chevron are important for tracking capex plans for 2022 because the world economy desperately needs more investments in energy.
The preliminary data on Q1 earnings show that net profit margins are rolling over in the S&P 500 and MSCI World while holding up for the Nasdaq 100. This is a key thing to watch next week when the major US technology companies are reporting earnings, because profit margin insulation for technology amid galloping inflation could be a game changer for sentiment on the US technology sector. EPS growth in Q1 q/q is also only positive right now for Nasdaq 100 while down for the MSCI World and S&P 500. While profit margin insulation for technology companies could become the new hot topic and what drives a comeback for technology stocks, the opposite force at play are rapidly tightening financial conditions and discount rate on cash flows.
One thing is for sure, we are in for a very exciting next week as there are also mounting pressures coming from the strengthening USD and more bottlenecks in our global supply chain due to lockdowns in China.
The list below shows the most important earnings releases out of the almost 600 earnings releases next week in the earnings universe we cover.
The end of the road
Emboldened by surging crude oil prices, Saudi Arabia makes waves on the international stage, as Crown Prince Mohammed bin Salman manages to create a World Champions League, after buying the UEFA Champion League franchise.
As the world embraces GLP-1 obesity wonder drugs, the people next in line to get a prescription stop caring about dieting and exercising, figuring that the drug will later solve all of their weight-related health problems.
With the US budget deficit spiraling above 10% of the GDP, the government is desperate to foster demand for US Treasuries. Under intense pressure from the White House, Congress makes income from government bonds tax-free.
After a criminal group deploys the most deceptive AI deepfake ever seen, generative AI becomes a national security threat. With public distrust soaring, governments crack down with harsh new laws, puncturing the AI hype.
To fix the divergence in the global trade and financial system, the largest deficit countries unite to negotiate new world trade terms. For surplus countries, the reset of the global economic model is a painful adjustment.
As discontent with Biden and Trump rises to fever pitch, Robert F. Kennedy Jr sees his support rising inexorably in the polls. On November 5, Kennedy wins the US presidential election, ushering in a new era in US politics.
Stepping up Japan's economic transformation in 2024, PM Kishida brings in a host of populist policies to boost domestic demand. As the GDP growth rate hits 7%, the BoJ is forced to abandons its yield curve control policy.
As people wake up to how little tax Europe’s billionaires are actually paying, the EU Commission implements a wealth tax of 2%. The tax sends shockwaves through Europe's luxury industry, with luxury giant LVMH plunging 40%.
