Weekly Market Update- Week Ending 26/01/2024

Global Markets Update

Q4 earnings season picked up in the States this week. Investors are keen to see if reported earnings match the optimism displayed since the Federal Reserve pivoted on interest rate expectations back in mid-December.

So far, the mood has been pretty positive, with some high-profile ‘beats’ from names like Netflix and ASML, the world’s leading supplier for the semiconductor industry. Tesla, however, hit the skids on Thursday, ending the day down some 12%. Investors were concerned as the car maker downgraded earnings growth expectations in the period ahead as it prepares for the launch of a next-generation low-cost model in the second half of 2025. Profit margins continued to fall as it pressed ahead with price cuts over the period to head off increased competition from traditional carmakers.

Next week promises to be a bit of a blockbuster. Much of the growth in the S&P 500 in the past twelve months has come from the share price gains seen by the “Magnificent Seven” tech companies, which include Apple, Microsoft, Amazon, Alphabet, Meta, Nvidia and Tesla. The first five of those names are all announcing earnings next week, and the data released could likely drive investor sentiment in the period ahead.

John Naylor, Chartered FCSI – Head of Investment Committee