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Will the Nasdaq’s Comeback or Collapse Begin With GOOGL Earnings Today?
Alphabet — aka Google — reports earnings after the close today along with AMD... Along with lots more Big Tech earnings all week. Will this result in a pop, or do we keep churning and waiting for the U.S. election and FOMC next week?
Come join me as we dive in and see what’s moving!
Plus, as always, we have stocks popping and dropping so come find out what is moving this morning as I look for stocks and do some live premarket analysis on SPX, SPY, NDX, QQQ, Russell, IWM and other stocks that are potential plays for the day.
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Nasdaq's Comeback or Collapse? Big Tech Earnings Could Decide With S&P 500 Leading
With Big Tech earnings piling in this week, we’re looking at a lineup that includes AMD (AMD), Alphabet (GOOGL), Microsoft (MSFT) and Amazon (AMZN), which will no doubt create waves across the market.
The reports from these heavy hitters bring high potential for volatility – and not just any volatility. They could influence more than just the Tech sector as the Nasdaq tries to shake off its recent drag compared to the S&P 500.
Here’s what’s interesting…
While the S&P 500 has pushed to new highs, the Nasdaq hasn’t hit a new peak since July. This lag tells us something significant about current market behavior.
The S&P 500 benefits from a broader base and isn’t tied down to tech in the way the Nasdaq is. On one hand, the S&P 500 has more wiggle room, diversified across multiple sectors that have helped buffer its upward trend.
On the other hand, the Nasdaq’s heavy reliance on growth-oriented tech means any miss in Big Tech earnings could deepen its slump and extend its underperformance relative to the S&P 500.
For tech investors, this week offers some high stakes, and we could see one of three outcomes. If Big Tech surprises to the upside, it could kick the Nasdaq into higher gear and potentially narrow the gap with the S&P 500.
Even so, any lift is likely to be short-lived, given the amount of macro risk stacked against the market, particularly in tech. Should earnings merely meet expectations, we might see the Nasdaq maintain its lag, as it has done in recent weeks.
But if major names fail to meet their targets, then the Nasdaq might see a sharper pullback. That would only further widen the trend between the Nasdaq and S&P 500 and create more choppiness across markets.
It's also worth noting that upcoming macro events like GDP reports, the PCE index, and non-farm payrolls will only add more potential fuel to this fire. If we see a significant rally in Big Tech, there’s an increased risk that we’ll experience a subsequent correction – either triggered by external events or the market pricing in earnings reality versus expectations.
The election and upcoming Federal Open Market Committee (FOMC) meeting also introduce the chance for a 2016-style 5% overnight move, as seen when the market responded unexpectedly the day after.
This could affect the S&P 500 and Nasdaq differently, depending on the earnings landscape Big Tech sets this week.
In short, this week’s Big Tech earnings could provide the spark to either push the Nasdaq up toward the S&P 500’s pace…
Or leave it in the dust.
And if they miss? We’re looking at a potential setup for volatility that could be the Nasdaq’s next correction moment.
Today’s Daily Chart Setup: Integer Holdings (ITGR)
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