The S&P 500 shows a safe and well-oriented upward trend. However, the hypothesis of a correction due to a possible "profit warning" by tech companies raises concern.
This week also seems to be proceeding in the best possible way, with the US indices preparing to continue their bullish direction. In the last 13 weekly stock market sessions, the S&P 500 has recorded only one red candle, of a decidedly irrelevant width compared to the green ones. The good technical outlook for the US stock index alternates with new concerns related to ongoing events, including earnings season. With the start of the new quarter and the constant growth of US stock indices, which continue to reach record levels, many are wondering whether it makes sense to worry about possible declines, perhaps resulting from new worries or profit-taking.
What can you expect from the S&P 500?
US stocks: which events to monitor carefully?
The fear of a “profit warning” for 2024 is strongly felt among stock market operators and in the media, becoming an increasingly evident concern. In a delicate historical moment like the current one, many believe that little may be enough to alter the variables at play. From a macroeconomic perspective, the focus is on Thursday’s data on durable goods orders, which will provide important insights into the health of the economy. GDP and data on unemployment benefit claims are also crucial variables for defining the new stock market expectations regarding the future monetary policies of the US central bank.
earnings season has already begun, and the challenge of beating the consensus does not seem to be rewarding many at the moment, rather leading to new disappointments. However, the stock markets do not seem worried, since, apart from companies such as General Electric, J&J, Lockheed Martin, Procter & Gamble, Netflix, Tesla, IBM, Intel and others, a meaningful assessment of the quality of the earnings season will come next week, when more than 20% of S&P 500 companies report their quarterly results .
Watch out for tech stocks’ profits
In this context, the market is observing technology companies with particular interest, given that with the increase in the P/E of many of them, including emerging ones, investors have a strong need to confirm their earnings expectations. There is a risk of a significant reduction in expectations on some of these companies, which perhaps have placed excessive promotional reliance on the issue of AI to present their business model to potential investors, when in reality they were AI, or they are not adequately positioned in the market to generate the profits that the market has anticipated in the price of their shares. In essence, a consensus far from the data communicated by the companies could in this case actually generate the "profit warning" phenomenon which seems to worry many market operators at the moment.
Original article published on Money.it Italy 2024-01-24 15:30:00. Original title: S&P 500, nuove preoccupazioni in vista?
