S&P 500 Is Higher Than Ever. Can Earnings Support the Growth?

10월 22일

Tech giants are in the waiting room, prepping their financial updates while investors drool over prospects of AI-fueled revenues. The season kicked off with Wall Street banks posting some convincing numbers for the September quarter, painting an optimistic outlook for Corporate America’s biggest and brightest players.

The S&P 500 is hot, hot, hot. Investors just can’t get enough of the 500-strong index and last Friday they pushed it to its 47th record closing high of the year. And they did it with finesse — on the eve of the 37th anniversary of the “Black Monday” market crash. (On Oct. 19, 1987, the S&P 500 wiped out a record 20% and the Nasdaq shed 12%.) Broadly, US indexes are having a bumper year, with most of them up double digits or more.

With no time to waste, markets are shifting their attention to the looming slate of big tech earnings reports. Here’s what’s going to be turning heads this week:

📌 On Wednesday, EV maker Tesla TSLA will be the main character in the world of corporate updates. Wall Street is eyeballing earnings north of $25.4 billion, up from $23.4 billion in the year-ago quarter. Besides Elon Musk’s EV giant, Wednesday will bring earnings from Coca Cola KO, Boeing BA, IBM IBM and telecoms mainstays T-Mobile TMUS and AT&T T.

📌 On Thursday, the earnings roll keeps rolling in with e-commerce and cloud computing juggernaut Amazon AMZN reporting after the closing bell.

But all that earnings action looks fairly light — wait till you see what’s cooking for next week. *drumroll please* … 🥁

The Magnificent Seven club of tech highflyers will be represented by four of its members. (Tesla and Amazon report the prior week and Nvidia NVDA reports in about a month from now.)

📌 On October 29, Google parent Alphabet GOOGL is scheduled to report earnings figures. Shares of the tech heavyweight are up about 18% on the year but got stuck recently after the Department of Justice filed a range of possible changes aimed at reducing Google’s search dominance.

📌 On October 30, Facebook parent Meta META and Microsoft MSFT will reveal how they fared in the three months through September. Mark Zuckerberg’s Meta flaunts a massive 65% year-to-date increase (and some new glow-up for its loose-shirt-wearing tech bro founder.) Microsoft, on the other hand, is up by a more modest clip of 12%.

📌 On October 31, Apple AAPL will release its highly-anticipated earnings data that will include a glimpse into how well the new iPhone 16 is selling. Shares of Apple are up roughly 27% for the year.

These seven mega-cap corporate giants are expected to show an 18% rise in third-quarter profits, according to Bloomberg Intelligence. If materialized, that would be substantially slower than the 36% seen in the second quarter. The sheer size of the pack accounts for about 30% of the total market cap of the S&P 500 (which not long ago celebrated its $50 trillion milestone.) Nvidia and Apple alone are worth more than $7 trillion combined.

What’s on your radar for this earnings season? Are you waiting for a tech giant to dip or maybe you're after a bank stock or a car conglomerate? Share your comments below!