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APPLE LIKELY TO DICTATE THE FATE OF BIG TECH IN BUSY
EARNINGS WEEK (1052 ET/ 1452 GMT)
Slowing global growth worries have slammed U.S. stocks at
the start of one of the busiest week of earnings season that
will include quarterly reports from tech-related heavyweights.
Apple Inc, Microsoft Corp, Google-parent
Alphabet, Meta Platforms and Amazon.com Inc
– that account for a quarter of S&P 500’s weight – are
all slated to report their earnings in the coming days.
Wedbush analyst Dan Ives believes both Microsoft and Apple
will post strong numbers this week, which could dictate the path
of tech stocks over the coming months.
“We continue to view this bifurcated tech tape will be
driven higher by software, semis, cyber security, and product
driven names (Apple) as part of this digital transformation,
while the (work from home) poster children such as Netflix,
Meta, Zoom, Docusign, etc. will continue to see
multiples compress as results soften off pandemic highs,” Ives
AJ Bell Investment Director Russ Mould noted Meta, Amazon
Apple, Netflix and Microsoft have lost $2.1 trillion in
combined market value between them since their December peaks, a
drop sharp enough to leave five of the six in ‘bear market’
territory, with Apple the sole exception.
“That raises the stakes for Apple’s second-quarter results
on Thursday as any degree of disappointment here – or weak
guidance for the third quarter – could put a further squeeze on
the share prices of Big Tech and possibly the wider US stock
market,” Mould explained.
A shocking subscriber loss at streaming giant Netflix Inc
last week triggered a selloff in growth stocks.
Growth stocks outperformed value plays in
early New York trading Monday, with Amazon, Facebook, Alphabet
and Microsoft rebounding from sharp losses on Friday.
DOW, S&P 500 EXTEND RECENT SELLOFF EARLY, BUT TRADING CHOPPY
(1020 EDT/1420 GMT)
Major U.S. stock indexes are mostly down in choppy early
trading on Monday, extending recent losses amid worries over
COVID cases in China and possibly an aggressive U.S. interest
rate hike schedule.
The Dow and S&P 500 fell more than 1% each
after the opening bell, but are last well off those lows.
Most of the major S&P 500 sectors are lower in early
trading, with energy down more than 4%, leading
Of note, the Nasdaq Composite hit a low at 12,722,
putting it around 1% from its March intraday trough. It has
since clawed its way back to slightly above flat.
Wall Street tumbled on Friday, as an increased certainty
around aggressive near-term rate rises took its toll on
investors. It was the third straight week of losses for both the
S&P 500 and the Nasdaq, while the Dow Jones Industrial Average
posted its fourth weekly decline in a row.
Here is the morning market snapshot:
NASDAQ COMPOSITE: 2022 LOWS AT RISK (0900 EDT/1300 GMT)
In the wake of the market’s back-to-back bruising at the end
of last week, U.S. equity index futures are
pointing to downside follow-through at Monday’s open.
The Nasdaq Composite ended Friday down more than 20%
from its November 2020 record close, and only around 2% from its
March low at 12,555.35:
The March intraday low was just slightly below the Feb. 24
intraday low at 12,587.882, and essentially right at the 38.2%
Fibonacci retracement of the entire March 2020-November 2021
advance, at 12,552.36. The IXIC’s low close so far has been
Thus, this appears to be a strong band of support.
Additional support can be found at the March 2021 trough at
In the event the IXIC tests, or violates its March 2022
lows, traders will be watching to see if the daily RSI, which
ended Friday at roughly 30.00, can stabilize ahead of its
late-January low at 16.599.
If so, amid elevated volatility, a bullish momentum
convergence may then lead to a sudden, powerful upward reversal.
However, if this RSI trough gives way, the pattern may be
forced to reset, which may then require a more protracted and
deeper IXIC decline, before another positive convergence could
The 50% retracement of the IXIC’s March 2020-November 2021
advance is at 11,421.82.
FOR MONDAY’S LIVE MARKETS’ POSTS PRIOR TO 0900 EDT/1300 GMT
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)