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“There is some short-term optimism, almost like a last hurray… before the rate hike and any worries about Big Tech with a Democratic government slow it down.
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This is Gene Goldman, chief investment officer at Cetera Financial Group, speaking to Bloomberg News about the surge in tech purchases by hedge funds ahead of Apple AAPL’s high-profile earnings,
and Amazon AMZN,
in the coming days.
According to Goldman Sachs Group prime brokerage, hedge funds have increased their net exposure to tech industry megacaps at one of the fastest rates in recent years. It came from a stretch where “smart money” was unloading some of the most important names.
After resisting the pandemic, Facebook FB,
Apple, Amazon, Microsoft MSFT,
and GOOG Alphabet,
All are expected to post earnings growth faster than the rest of the market for a 12th straight quarter, according to Bloomberg estimates.
If Netflix’s NFLX,
showing after last week’s results is any indication, such a “last hurray” could pay off for those who load up on tech stocks. Netflix jumped 17% on solid numbers.
Lily: The ‘biggest red flag’ in this bull market has just disappeared, says trader
Megacap tech aside, it’s a huge week for profits overall, with nearly a quarter of the S&P 500 ready to report results. Together, the reporting companies represent 39% of the index at market value. Since the S&P 500 is market cap weighted, this list of companies will have a disproportionate impact on the index’s profit trajectory.
It’s also a busy stretch for the Dow Jones Industrial Average DJIA,
with 13 leading index members preparing to release their quarterly results, including 3M MMM,
, Johnson & Johnson JNJ,
and American Express AXP,
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