Can Technology Crush Market Blues?
Can Technology Crush Market Blues?
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The Tech Bounce Back rally continued until Wednesday evening February the 2nd. After hours, Meta [FB] crashed the party falling 23% to $249 on figures that missed earnings forecasts. Daily active users fell for the first time since founding, together with a lackluster forward guidance statement. Trust Zuckerberg of Facebook [the anti-social Network] to throw a spanner in the works of conviviality and precipitate a 2% plunge on Nasdaq futures. As of writing Meta Platforms Inc [FB] closed at $238.
By the standards of Tech valuations, at $39 billion, Spotify Technology [SPOT] is small fry. Still, it slumped on the furor ignited by its star performer Joe Rogan who allegedly was accused of misinformation about Covid. Some ancient performers from the last century [Neil Young & Joni Mitchell] took exception from his interview and, in a hissy fit, withdrew their content from the social media company occasioning the shares to fall 17% to $160 from an all-time high of $387 in April last year.
Outstanding quarterly figures from Apple [AAPL] last week saw the stock rise from 150 to 170 and, as of writing, trade at $174.
On Tuesday, February the 1st, Alphabet Inc [GOOG], parent of Google, beat fourth-quarter sales expectations [revenue was $74.9 against estimates of $71.6] as the search giant's internet advertising, cloud computing, and hardware businesses benefited from a world going digital, sending the shares skywards +7% to nearly $3,000 a share and the prospect in July of a 20 for one stock split [$150 stock split equivalent] only promised further momentum if stockholders approve as the concomitant increase in liquidity. This proposed split will undoubtedly attract new investors of many shades, from day traders to those that would psychologically balk at paying over a few hundred $ for any share.
Google generates more revenue from Internet advertising than any other company. The results were the latest to signal that the frantic global trend toward a digital economy has made many Big Tech companies resistant to market shocks.
Amazon finally delighted the market after hours on Thursday the 3rd, surging over 15% in intraday trading to $3173 [still below its all-time high of $3,773] on net sales increasing to $137.4 billion against market expectations of $120 billion.
Concerns about American national debt, which passed the $30 trillion landmark in the past few days, rising inflation, Russian and Chinese terrestrial tensions, COVID-19 with its multiple variants and supply-chain shortages have rattled global markets recently and affected sales in many other business sectors amid cautionary comments from industry leaders.
Most Tech companies seem immune from such vicissitudes; they control the key gateways to the Web and have not seen a dramatic dip since the early panicked days of the pandemic in March 2020.
Enjoy the tech-inspired February bounce. Early days still, but specific markets will soon get back to worrying about debt ceilings, rising interest rates, energy security, inflation, tax hikes, and geopolitical imponderables before too long.