Stock market: Google, Apple, Facebook, Amazon, Microsoft… will the results be surprising?

The week that is opening promises to be particularly busy for the financial markets: the Fed’s decision on its rates and another sharp increase expected, the first estimate of American growth for the second quarter which could well trigger a recession in the American economy if the figure was negative (because already -1.6% in the first quarter) and publication of the results for the American tech giants, the Gafam, namely Alphabet (Google), Apple, Meta (Facebook), Amazon and Microsoft.

And this earnings season may well prove to be a tricky one. First, there is the question of the impact of the sharp rise in the dollar on these groups. If the SP500 groups have “only” 29% of their income coming from abroad, this percentage rises to 59% for the “tech” part of the SP500 according to Goldman Sachs. At the beginning of June, Microsoft revised its sales forecast downwards, citing the strength of the dollar.

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“To bring out our future Gafa, we must create large pan-European banks!”

Then there are the “weak” signals but which should not be ignored: several US tech giants, such as Apple and Alphabet, have recently indicated that they will slow down the pace of recruitment… raising questions about the “ guidance” of these groups, that is to say the projections, for the months to come.

Indeed, the marked deterioration of many macroeconomic indicators in the United States in recent months and these announcements on the pace of parallel recruitments legitimately give rise to fears about this earnings season but also about guidance. Particularly in a highly inflationary environment which has brought consumer confidence to the ground across the Atlantic (the confidence index measured by the University of Michigan hit a 40-year low in June…).

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EU adopts common position to end Gafa abuses

Last recent indicator that surprised the United States unpleasantly: the PMI Services index, which plunged below 50 in July (reflecting a contraction in activity in services) while the consensus was still counting on an expansion with an estimate of 52 ,6. This is the strongest contraction in the index observed since June 2020 (first Covid wave).

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GAFAM: are the digital giants threatening our economy?

Even though most of the dollar’s rise is likely behind us, and even though China has eased lockdowns overall (thereby easing supply chain strains), macroeconomics and consumer fears could hold some surprises in the coming months. Gafam results this week. It is worth remembering that the Gafam group represents 50% of the total capitalization of the Nasdaq1000 index and 22% of that of the SP500. To be continued…

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