Data from China, a Twitter hack, geopolitical tensions and worries about viruses are scaring investors out of stocks on Thursday, with more earnings and weekly unemployment claims ahead. Markets encouraged positive news about vaccines just a day earlier.
The week has also seen the Nasdaq Composite COMP,
wobble, 0.6% less to date, versus a 3% increase for the DJIA industrial DIA,
but will that shake faithful technology?
Our call of the day, by Richard Grasfeder, senior portfolio manager at Boston Private Wealth, advocates for three big tech names.
“The force of technology will continue as long as the projection of the virus resurgence and subsequent blockades remains. These companies are rich in cash and have thrived in the low growth environment in recent years, “Grasfeder told MarketWatch in a recent interview.
First, Microsoft MSFT,
whose “Azure is well positioned to take advantage of shared gains in cloud computing. We believe that Street’s estimates for Azure growth are still too low, providing opportunities for faster growth to drive faster growth EPS (earnings per share), as well as potentially helping margin expansion, which would also help EPS growth, “he said. And Microsoft should take advantage of the continued” electrification “of corporate workflows with its computer systems. end to end.
Next up is Apple AAPL,
whose large installed base of iPhone users on an operating system is an “attractive target for application developers.” This translates into huge revenue opportunities for Apple in potentially new applications and services and hardware products, “he said. One risk: That large user base needs new products and services to continue generating more revenue.
Grasfeder’s latest technological choice is Accenture ACN,
you’re reaping the benefits of companies moving to the cloud. “Accenture can use its scale to generate operating profit and gain participation from companies like IBM that have not been as progressive,” he said. Eventually, the Accenture market and equity gains may fade, but Grasfeder believes that is years away.
He has had all three for at least five years and plans to keep holding on, though he said now is the time to pay attention.
“We are looking at MSFT and AAPL a little more closely now as valuations (eg, P / E Relationships) stretch. If stocks are too far ahead of our earnings growth expectations, we can reduce or eliminate stocks until valuations become more attractive or upside estimates materially exceed our S&P 500 performance expectations, ”he said.
Grasfeder believes that we will see “high volatility throughout the summer, and that the elections and relations between the United States and China could combine with concerns of the resurgence of COVID-19 to create oscillations in the market during August and September.”
The market
Dow YM00,
S&P ES00,
and Nasdaq NQ00,
futures are down, along with European stocks SXXP,
. Asia fell, with the SHCOMP comprised of Shanghai,
falling 4.6% after the Chinese data.
The graphic
China previously reported better-than-expected gross domestic product, but a troubling drop in retail sales.
The economy
Weekly jobless claims decreased, retail sales increased and the Philadelphia Federal Reserve Index fell. An index of home builders is still ahead.
The European Central Bank has left the key policy unchanged. You are already at the press conference with President Christine Lagarde.
The buzz
Morgan Stanley MS Shares,
BAC
is going up, while Bank of America BAC,
is down after each reported result, and Johnson & Johnson JNJ,
you are increasing your profits. Abbot Labs ABT,
is still to come, with Netflix NFLX,
due after closing.
Twitter TWTR,
is investigating a hacking of several prominent accounts for hours in connection with an alleged bitcoin scam. Stocks are falling.
An EU court decision will restrict data transfers to the US, possibly affecting Facebook FB,
Apple and Alphabet GOOGL,
The United States could ban travel by members of the Communist Party of China. Beijing recently made a similar move on some US lawmakers.
Random readings
Icebergs on the Armenian streets in summer.
Redditors exchange scary stories only at home.
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