Bloomberg News reports that investors expect that there might be further pummeling of the stocks in the current earnings seasons. Investors will keep a tab on Apple Inc., particularly since it is considered a bellwether for global economic conditions.
60% of the 724 respondents of the recent MLIV Pulse survey stated that this earnings season would push the S&P 500 Index much lower. This only means that there is no end in sight for the dismal condition of the stocks following a plummet on Friday, which crushed hopes, keeping in mind that the rally of two weeks could indicate something bigger impending. At least 50% of poll participants anticipate equity valuations pulling back further from the last decade’s average.
A Sea of Red Ahead
Several investors were asked about how earnings might impact the S&P 500 Index. The results were found to underscore the fear of Wall Street that even after the brutal selloff of the current year, the stocks still must stem from the price in risks associated with the central bank’s aggressive tightening as inflation has continued to stay high. Another disturbing aspect is that this scenario is not likely to alter soon. Friday’s data indicates that the US labor market has remained strong, thereby enhancing the chances of another rate hike by the Fed in the next month.
Apple in the spotlight
In a survey, 60% of the participants feel that one of the main stocks to watch out for is crucial Apple. The maker of the iPhone, which is the heaviest perhaps on the S&P 500 Index, is likely to hint into a wide array of key themes, including supply chains, consumer demand, the impact of the rising greenback, and rates that are escalating. The company is supposed to report on October 27th. JPMorgan garnered the second largest mention at 25%; however, Walmart Inc. and Microsoft Corp drew a noteworthy number of votes.
The reporting starts with S&P 500 plunging by 24% in the current year, on pace for the worst performance from the time of the Great Financial Crisis. Even against the gloomy backdrop, around 40% of the survey participants are inclined to invest even more in the value stocks compared to 23% for the growth.
Bloomberg News also reports that it was an awful year for US stocks. But the same is with other financial assets, from corporate bonds to crypto tokens. The balancing 60/40 portfolio of mixing bonds and stocks is an attempt to protect against the stronger moves prevailing in the markets either way that has lost out on more than 20% to date in the present year.
