Did Tech do it again?
Last week saw gains across most sectors reversing previous losses, but again within the confines of recently established upper and lower limits. Technology was the best performing asset class again with strong weekly Nasdaq figures eclipsing other sectors.
We are looking for signs of a breakthrough these levels to give indication of investor appetite and the effect of the current consumer squeeze finally biting in the real economies globally. Earnings, which have so far held up better than expected in general, may well start to show these effects filtering through to the profit statement and future guidance statements from companies.
With little change to geopolitical issues, the range trading looks set to continue until we have further clarification around inflation and economic fallout from higher interest rates.
We continue to favour value sectors, technology and Asian equities ( in particular China ) for medium term gain opportunities, but drip feeding investments in these areas looks like the best way to mitigate risk in the current environment.
This week
This week will see some of the biggest companies report their second-quarter earnings, and expectations are quite low. Traders are hoping companies clear this low bar, which could in turn help the stock market defend this year’s rally. The biggest name on this week’s calendar is Tesla (TSLA), which already reported record Q2 deliveries. The remaining Big 6 banks will also report this week, apart from Netflix and IBM.
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