Stocks declined Tuesday on the heels of another record-setting session, with investors looking ahead to the start of earnings results from mega-cap technology companies on Tuesday. Concerns over the and a regulatory crackdown in China also lingered.
The S&P 500 headed lower after the blue-chip index eked out ahigh during the regular trading day on Monday. The Dow and Nasdaq also slipped. Chinese stocks in the U.S. sank further on Tuesday, with like Alibaba (BABA) and Baidu (BIDU) each lower, amid speculation that a broad-based regulatory crackdown in China might spur U.S. restrictions against .
On Tuesday, investors are set to receive quarterly earnings results from companies including Apple (AAPL), Alphabet (GOOGL), and Microsoft (MSFT), or some of the most heavily weighted. According to FactSet, these will come on the heels of an already strong second-quarter earnings season, with the per share hovering at more than 74%, or the highest since 2009. And in the past week, prominent tech names, including Snap (SNAP), Twitter (TWTR), and Tesla (TSLA), have posted results that handily exceeded estimates, adding to optimism around the forthcoming reports.
“These companies, for example, Google, Microsoft, even Amazon, have cloud types of research and business coming in, which will bode well for the big push into big data and 5G,” Sylvia Jablonski, Defiance ETFs co-founder, and chief investment officer told Yahoo Finance. “I just think that these companies are so much more than they were even a year ago, and they’re poised to continue to grow.”
“In terms of, is this the peak? We have this weird scenario, where we’re still comparing base case from year-over-year, which was in the heart of COVID,” she added. “It’s thought that this quarter will grow 8% to 9%. Next quarter will cool down to 8%. We’ll probably finish the year at 7% to 7.5% GDP. I still personally like that number. I think these tech names, the names reporting this, have a good 10% left to go for the rest of the year. And they’ve been slow movers until now, so I think it’s still a good opportunity to be in these names.”
Concerns over the path forward forto linger for investors, especially given the recent surge in the spread of the Delta variant. On Monday, economists downgraded their forecast for third and fourth-quarter growth, citing risks that a slower return of service sector activity would generate a sharper-than-expected growth deceleration.
Other economists, however, have maintained a more.
“We’re not on the side of thinking that you’re seeing a very sharp growth slowdown. We think the consumer remains solid; we think services spending for the consumer remains solid,” Matthew Luzzetti, Deutsche Bank senior economist, told Yahoo Finance on Monday.
“There are no doubt growth concerns out there. There are no doubt concerns about the point, we view that as a downside risk. We still have a baseline of a very robust growth outlook, at least through the remainder of thisspilling into economic activity over the coming months,” he added. “But at this
10:27 a.m. ET: ‘There’s a bit of a balance that investors need to strike’ between cyclical and growth stocks: Strategist U.S.choppily over the past several weeks, alternating between shallow pullbacks and moves to new highs. Beneath the surface, leadership has also see-sawed between cyclical and growth stocks, or those poised to benefit from the reopening and those serving as a hedge against resurgent virus fears.