After a rocky start to the second quarter, stock market indexes (^DJI, ^IXIC, ^GSPC) are having a solid day to start the trading week. The S&P 500 topped his 5,000 mark, ending his six-day losing streak as did the Nasdaq Composite Index.
Yahoo Finance Market Reporter Josh Schaefer discusses major tech companies, including whether AI will give tech companies another big boost this earnings season and everything Tesla (TSLA) has to report on. Quarterly results will be released on Tuesday, April 23rd, detailing the biggest trends driving stock prices ahead of earnings.
For more expert insights and the latest market trends, click here to watch the full episode of Market Domination Overtime.
This post was written by luke carberry morgan.
video transcript
– Josh, now that the S&P 500 has snapped its six-day losing streak, what do you think will happen next?
Josh Shafer: Yeah, I think the other Josh, the better Josh, Josh Lipton was really spot on when he talked about market movements and the fact that they actually held high today. This is what we've been observing here for a week and actually he looks at something like a 5 day chart and as you can see here it goes up and then at the end of the day can be seen to be declining. You get up, but at the end of the day, you collapse. So I think just seeing a little bit of resilience in this market, essentially knowing that there might be some stability at the current level, is probably a positive for investors.
Considering today's movements, it struck me that several sectors are moving higher. It's not like he's seen a big tech stock rally, like NVIDIA is up over his 4% as I see it. But if you look at the S&P 500 more broadly, and I'm looking at YFi Interactive right now, there are four sectors that are outperforming the S&P 500. Yes, the technology is there. But there are also utilities. There are daily necessities, and there is also finance.
So this is part of the story that we've been telling for the last couple of months, and it's kind of expanded upon, and it's probably not all about technology. And I think it's interesting to see the problem there. The buyer is back here. There are still people who want to get into other industries outside of tech, not just the big tech companies that we talked about a lot on Friday when the Nasdaq fell.
– So Josh, what is your feeling about big technology? In other words, do you think it's enough to just report it and punch it, or is it not? We will have to give really strong guidance.
Josh Shafer: Isn't that what they always do?
– it is–
[INTERPOSING VOICES]
– You have to pretend they're not, Josh. Otherwise, there's no drama.
Josh Shafer: That's what Zack was talking about last year, right? But especially Josh, I think that's interesting. I'll be interested to see what Microsoft says about AI and how AI will contribute to revenue now or in the next quarter or two. Having covered the company's earnings reports over the past few quarters, I've found that the company's performance has been somewhat okay. We are bullish overall on AI. Investors are happy with where Microsoft is in the AI space. But is that money now coming back to the company?
And so far, the answer is no. I think that's going to be a big part of the story over the weekend, so I think it'll be interesting to see if it can shake up the emotions. It's about what we learn about the whole AI story. Where should I invest more? Will this investment further help companies like her NVIDIA that are buying ships? Will it help outside companies? I think it would be a good idea to read it roughly.
– And expectations are very high. So Netflix was a technology company. I looked at the report last week and saw that the stock price went down because they didn't win and didn't go up, and I think that was expected. So with these technology names, you're wondering what happens there? But you're also looking at Tesla.
Josh Shafer: And their expectations aren't that high.
– In other words, exactly.
Josh Shafer: Expectations are not high at this point. And I think this will be interesting to me. Tesla will report earnings after the bell on Tuesday as expectations are not high. We've finally reached a point with Tesla where I think expectations are probably starting to get a little more realistic. I wonder if Elon could say anything on the conference call that would actually reinvigorate his faith in this company. It feels like he hasn't had a positive headline about Tesla in a month now.
– If you were a Tesla investor, you'd wait for the call and hope that Elon Musk could tell you more about the small car he's developing or what exactly will happen — I think in the summer. At this massive robotaxi event to be held on. But I don't know if you can get it.
Josh Shafer: Yeah, no, so how the stock price has moved in the past is somewhat consistent with the idea of Amakudari. Things that don't actually arrive next quarter will contribute to this year's earnings, but great ideas like the Cybertruck can actually arrive five years after they're announced. And a little bit of information and maybe clarity about that low-cost car or just the margins, and where are we going to get to that margin story? Have we completely hit rock bottom? Will it come back? There were a lot of questions asked on the conference call, and it will be interesting to see how the stock, which is down more than 40% this year, fares in this environment. Is there more pain ahead, or will we see enough recovery, or perhaps enough recovery, for stocks to eventually recover?
