Home NewsStock Market News This week’s trading notes: heavy tech stock earnings, Apple earnings, European and Japanese central bank interest rate decisions | Anue Juheng-US Stocks

This week’s trading notes: heavy tech stock earnings, Apple earnings, European and Japanese central bank interest rate decisions | Anue Juheng-US Stocks

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This week’s trading notes: heavy tech stock earnings, Apple earnings, European and Japanese central bank interest rate decisions | Anue Juheng-US Stocks

This week’s key international financial events include: earnings reports from tech giants such as Apple, Microsoft and Alphabet, European and Japanese central bank interest rate decisions, major economies Purchasing Managers’ Index (PMI), US gross domestic product (GDP), core personal consumption expenditures prices Index (PCE), Michigan Consumer Confidence Index and House Price Index and other economic data.

This week’s trading notes (1024-1028)

1. Earnings from heavy tech stocks

U.S. stocks enter the super earnings week this week, including Apple, Microsoft, Alphabet, Amazon and Meta, which account for about 20% of the S&P 500 and more than one-third of the Nasdaq Composite. Released this week, whether U.S. stocks can continue the rebound last week depends on the performance and prospects of these companies.

Earnings for the S&P 500 rose 3.1% in the third quarter from a year earlier, the worst performance in more than two years, Refinitiv IBES data showed, while earnings growth for next year fell to 7.2% from a forecast of 7.8% at the beginning of the year.

Among tech giants, only Apple has outperformed this year, with the iPhone maker, which accounts for 7% of the S&P 500, down about 17% so far this year. Microsoft and Amazon both fell about 28%, while Alphabet fell 30%, both lagging the S&P 500’s 21% decline.

Investors tend to be attracted by the financial strength and competitive advantages of Big Tech, believing that they can perform well in an uncertain economic environment, but Refinitiv data shows that of the Big Tech companies, only Apple has made profits and has been profitable in the past two quarters. Revenue came in better than expected, and the remaining companies struggled in key areas like Microsoft’s personal computer (PC), Alphabet’s ad spending and Amazon’s consumer purchasing power.

Rising U.S. Treasury yields have also weighed on tech valuations, as higher yields could weigh heavily on companies’ expected earnings going forward. U.S. 10-year Treasury yields rose to a 14-year high last week.

Apple Earnings

Global market capitalization leader Apple is expected to announce its new quarterly earnings on Friday (28th) Taiwan time. In addition to paying attention to the impact of economic headwinds on demand, the market will also observe the impact of a stronger dollar on sales.

The recent news that Apple has cut orders for the iPhone 14 Plus has raised concerns about a slowdown in demand for high-end models. The foreign media “The Information” quoted people familiar with the matter as saying last week that Apple has asked more than one Chinese manufacturer to stop producing parts for the iPhone 14 Plus.

In addition, Bloomberg reported in September that weaker-than-expected demand led Apple to abandon its iPhone 14 production increase plan, maintaining its iPhone 14 production target of 90 million units by the end of the year.

Analysts tracked by FactSet expect Apple’s fourth-quarter revenue to rise 6 percent to $88.7 billion and earnings per share (EPS) to rise 2.4 percent to $1.27.

Looking at the product mix, analysts expect iPhone revenue to increase by 12% year-on-year to $43.4 billion, iPad and Mac revenue are estimated to decline from the same period last year, to $7.7 billion and $9 billion respectively, Apple Watch and other wearable devices, smart home And accessories revenue is estimated to have increased 1% to $8.9 billion, and it is worth noting that analysts expect services revenue last quarter to exceed $20 billion for the first time.

European and Japanese central bank interest rate decisions

Inflation in the euro zone unexpectedly climbed to 10% last month, sparking expectations for another sharp rise in interest rates by the European Central Bank (ECB), which is expected to rise another 3 yards at Thursday’s meeting.

Considering the euro zone’s high reliance on imported energy, a weaker euro could make electricity more expensive, fueling inflation and undermining economic growth, markets believe that this meeting of Central Bank Governor Christine Lagarde may sound hawkish to defend the euro .

On the other hand, the Bank of Japan (BOJ, Bank of Japan) is expected to keep its ultra-easy monetary policy unchanged, with wage growth and inflation expectations still subdued even though Japan’s inflation rate has reached 3%, which supports the BOJ’s view that The current inflation is driven by supply-side factors and will subside soon. The Bank of Japan’s adherence to an ultra-easy policy has caused the yen to lose about 30 percent of its value against the dollar this year.

In addition to the central banks of Europe and Japan, the central banks of Canada and Brazil will also announce interest rate decisions this week. The market expects that the central bank of Canada will raise interest rates by 2-3 yards under the continued high inflation, and the central bank of Brazil is expected to keep interest rates unchanged.

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