Breaking up: the pandemic continues to boost Microsoft’s business, which – as my CNN business colleague Clare Duffy reports – is amplified by sales of computers and gaming systems, as well as cloud computing tools that help businesses facilitate remote work.
“It was a blowout number that would be another feather in the tech sector’s range,” Wedbush Securities analyst Daniel Ives told clients. “The cloud growth party is just getting started.”
Apple is also expected to show strong demand for electronic devices, especially since its new iPhone 12 was launched last quarter. “Despite the later launch of iPhones, demand for the latest models remains strong,” Bank of America analyst Wamsi Mohan said in a research note this week.
Facebook, in turn, is poised to get a boost from new shopping and video capabilities, which are expected to generate significant revenue thanks to the large number of people nailed to their phones and computers at home.
The company has been profitable for five quarters, a first in its 17-year history. Now that it’s part of the meticulous S&P 500, there’s new pressure to deliver. Guidance on 2021 deliveries is crucial.
But strong results from internet giants will only feed the narrative pro stocks and push the technological Nasdaq Composite to new heights. Talk of a bubble is just because of increase.
“We do not think we are still in the late stages of a bubble in the overall stock market,” John Higgins, chief economist at Capital Economics, said in a note to clients on Tuesday. “Nevertheless, we acknowledge that the rise in the Nasdaq Composite indicates that we may at least be in the early stages of a bubble again, even if the rise in the index is partly justified by the profit improvement of companies in the technology sector from the pandemic. “
The ‘unnatural, insane’ GameStop rally continues
Latest: GameStop’s share exploded 93% on Tuesday, ending the day at $ 147.98. Profits are also fed by traders betting on GameStop, who are in a hurry to buy shares to limit their exposure to a ‘short press’.
Remember: Shares in GameStop, which is expected to lose money over the next two years, closed at $ 18.84 a share in 2020. Clearly, demand has completely detached itself from expectations about future earnings and inherent value.
On the contrary, online commentators like what they see as a David vs. Goliath triumphs over hedge funds and short sellers, and encourages the democratization of investment through free platforms like Robinhood.
But the dramatic rise in GameStop’s share is raising growing concerns in the investment community – even among those who were previously bearish.
‘If I sit [GameStop] on your radar, and you did well, I’m really glad for you. But what’s going on now – there must be legal and regulatory consequences, “he tweeted on Tuesday. It is unnatural, insane and dangerous. “
U.S. companies continue to grapple with Capitol riots
CNN interviewed the approximately 280 companies in the Fortune 500 that supported the 147 Republican lawmakers who objected to ratifying President Joe Biden’s victory. About 150 responded, representing $ 14 million in donations to the politicians involved during the 2020 cycle.
Among the findings: Many of the businesses that have chosen to suspend donations from the campaign have approached a broad quasi – to freeze contributions across the board, rather than targeting Republican objectors.
While 120 of the companies said they had decided to suspend or terminate the political giving in some form, 73 said they would stop donations to all federal candidates. Only 31 companies had specific timetables for how long their political activities would cease.
Sheila Krumholz, executive director of the non-partisan Center for Responsive Politics, said how long the corporate uprising would last is an open question, especially since fundraising campaigns usually slow down in the months following an election.
“Right now, it’s easy for them to sit back,” Krumholz said. “It is difficult to imagine that it would last through the election and the general election in 2022.”
Following
Also today: the Federal Reserve announces its latest policy decision at 14:00 ET, followed by a press conference chaired by Chairman Jerome Powell. Any comments on when the Fed is going to look at reducing bond purchases or raising interest rates will come under scrutiny.
Come tomorrow: how has the US economy fared during the last three months of 2020? Investors will find out when the GDP numbers occur.