Market to Experience Turbulence? Apple and Amazon Among Four Tech Giants Releasing Earnings Reports Simultaneously This Week

Apple, Amazon, Alphabet (Google's parent company), and Facebook, the four tech giants, will simultaneously release their second-quarter financial reports this Friday. Due to the significant influence that these four companies have on the overall performance of the U.S. stock market, the market is closely watching their financial performance. Professional investors further indicate that the day of the release will be the most intense day in the market.

Tech Giants' Second Quarter Financial Reports

Four of the top five largest stocks in the global market are set to release their latest financial reports this Friday morning, as reported by CNBC. The four tech giants with a combined market value of nearly $5 trillion – Apple, Amazon, Alphabet (Google's parent company), and Facebook – will announce their second-quarter earnings after 4 a.m. Taiwan time on Friday. Dan Niles, founder of AlphaOne Capital Partners, pointed out that Friday will be a crazy day, and if people pay too much attention to those numbers, it might not be a good thing.

"How will people interpret if they announce that advertising spending has started to slow down in the past two weeks? These stocks have risen so much, and with so many people in the retail market holding these stocks, investors may not be able to correctly interpret what they see (referring to the financial reports), leading to some very crazy behavior."

The performance of these companies in the overall market has already raised concerns, although other companies such as Procter & Gamble, Comcast, Eli Lilly, and Ford will also release their earnings on the same day. However, the market momentum and attention are mostly focused on these four tech companies, as they are market leaders with market capitalizations exceeding $1 trillion each. Jonathan Golub, Chief U.S. Equity Strategist at Credit Suisse, stated:

"When the reports come out, it will trigger massive (market) volatility."

Influence on the U.S. Stock Index

Apple, Amazon, Alphabet, and Facebook collectively account for about 16% of the S&P 500 index. This share has limited impact on the S&P 500. So far in 2020, Amazon's stock price has risen by 63%, while Apple has grown by 29% year-to-date, and Alphabet and Facebook have increased by around 13% each. However, despite this, the performance of the S&P 500 index remains less than ideal, with only about a half percentage point increase year-to-date.

Jonathan Golub pointed out that in the past 12 months, the four major tech stocks and Microsoft have averaged a 49% increase, while other companies in the S&P 500 index have not performed as outstandingly during the same period. Additionally, the analyst also noted that the average net profit margin for these five stocks, including Microsoft, over the past 12 months is 17.3%, which is 70% higher than the rest of the stocks in the S&P 500 index.

In contrast, the influence of these four stocks on the Nasdaq 100 index is much greater. These four companies account for approximately 34.5% of the total share of the Nasdaq 100 index, and the Nasdaq 100 index has risen by over 20% year-to-date.

Impact of the Four Giants on Bitcoin

After comparing the trends of these four major tech stocks and Bitcoin year-to-date, it was found that although Bitcoin and the four stocks do not show as significant correlation among themselves, the overall price trends of the five assets are still aligned. Therefore, the possibility of the financial reports released after 4 a.m. on Friday affecting the price of Bitcoin cannot be ruled out.