The corporate reporting season is almost completed, and it can already be said that it was phenomenal for companies whose business models are best suited to work in locked conditions. First of all, it concerns the giants of the high-tech sector. However, the sluggish reaction of the market for high financial indicators of the largest US technology companies also shows that investors are not ready to buy their shares at the peaks (especially given the prospects for the renewal of economic activity).
Take, for example, Apple (NASDAQ: AAPL) - the manufacturer of the iPhone, which surpassed the expectations of analysts almost all the fronts. Nevertheless, from the moment of publication of the report (February 2), the shares fell by more than 5%.
Alphabet (NASDAQ: GOOGL) and Microsoft (Nasdaq: MSFT) are the only companies "First Five", whose shares were able to strengthen after quarterly releases. The capitalization of the Motherland company Google grew by 5% of February 2, while Microsoft shares added 6% from January 26.
Such a sluggish reaction of investors on strong reports suggests that large technological companies will not be able to move the market again in 2021, since vaccination gradually returns the economy to normal, reducing the demand for digital services and equipment.
Against the background of the restart of the economy, investors are also concerned about the potential tightening of regulation, which makes it difficult to maintain the high growth rates of the sector's shares (given the award with which they are traded in relation to the market).
Facebook (NASDAQ: FB) was in the target of the regulatory bodies of many countries because of its dominant position in the social networking market, which adversely affects the shares of the giant. In the fourth quarter, the company recorded record earnings and profit records, since the splash of e-commerce in the Christmas holidays season led to an increase in the activity of the company's platform users.
Investor preferences changed
Shares of technological companies moved to the background, and now cash flows are redirected towards companies, whose income suffered greatly during quarantine. Hope for the restoration of the economy was breathed in life in everything: from enterprises with a small capitalization to such outsiders as energy companies. From the point of view of the monthly speakers, Russell 2000 is ready to surpass Nasdaq 100 for the sixth time in a row.
These changes in the moods, however, reflect the market expectations regarding the growth of commodity demand and industrial products through budget stimulating measures and mass vaccination.
Nevertheless, some US energy giants have failed investors with their indicators for the fourth quarter. Exxon Mobil (NYSE: XOM) reported on fourth quarter loss in a row; Common losses for fiscal year exceeded $ 22 billion. Her competitor represented by Chevron (NYSE: CVX) recorded the third loss in a row.
The Caterpillar Heavy Equipment Manufacturer (NYSE: Cat), on the other hand, has exceeded analysts. At the same time, management believes that the current reporting period marks the growth of sales on annual terms, primarily in the construction industry.
The largest producer of mining and building equipment makes a bet on the restoration of commodity markets, which will breathe life into metallurgical and oil-producing enterprises affected by a pandemic. Since the beginning of the year, Caterpillar shares rose by about 24% and closed on Wednesday at $ 222.47.
Summarize
A number of the largest technological giants, who headed the powerful rally of the stock market from his March minima, could not attract investors with strong financial performance of the last quarter. This is due to the fact that market participants are afraid of slowing their growth as the economy vaccination and restart.
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