After the US CPI broke through 9% in June, the Federal Reserve's interest rate hike in July 1 75 basis points has become a "basic consensus", and even a 100 basis points rate hike has begun to be included in the scope of consideration.
When asked about the possibility of a 100 basis point rate hike, the chairman of the Atlanta Fed said that "everything is possible"; and , known as the "New Federal Reserve News Agency", , Wall Street Journal reporter Nick Timiraos, also said that the market expects a 100 basis point rate hike is getting higher and higher; major financial banks like , Nomura Securities , have also proposed a prediction of a 100 basis point rate hike.
Goldman Sachs trader John Flood said:
Inflation is still incredible, and the (company) earnings growth expectations are weakening. We must be very patient to buy on dips and use to squeeze as an opportunity to reduce positions, and we will usher in a long summer.
. Against the backdrop of weaker expectations of company profit growth, the seller agency has begun to take action.
Flood mentioned that as US stock is gradually entering the financial report season, the concerns of sell-side analysts are intensifying. they "stopped before the second quarter financial report season, and in the past five days, they scrambled to lower the ratings of more than 500 companies. Since the financial crisis, there have only been four times since the financial crisis that so many companies have been downgraded in a week. "
In this case, Bank of US 's Savita Subramanian used its "Q2 Income Tracker" to analyze the market environment, and the following are the main highlights:
First, the profit guidance ratio (the ratio of higher-than-expected companies to lower-than-expected companies) is declining. All macro indicators tracked by the bank now point to poor performance, and investors "have reason to be concerned about the new financial report season."
and the company's sentiment is sluggish, which has fallen to its low since the second quarter of 2020.
consumption and industrial activity showed signs of slowing down, as well as the increase in the number of economic unexpected events.
However, the development of the industry and software industries is still relatively healthy. Early reports predict that earnings per share median is 3%, and currently down 1% for the second quarter. By comparison, the average decline (other industries) in the past three months was 4%, and if the energy industry was removed, it would be 5%.
Goldman Sachs expects earnings per share in the second quarter to meet expectations, an increase of $55.35 year-on-year by 5%. Slim earnings guidance remains key: EPS will drop sharply by the second half of 2023, but earnings per share will be at least $20 higher in 2023.
The challenge of tech stock : shifting from long-term growth to preventing cyclical risks
Nasdaq 100 index consensus returns, lagging behind S&P 500 index for nine consecutive months. Since the 1980s, tech stocks have seen sales declines more than the S&P 500.
Although technology stocks can be driven by cost-effectiveness and recent growth in demand, large technology companies may be facing severe challenges in the context of deglobalization.
Even if it countercyclical capital expenditures should increase "counter-trend"
S&P 500 index component 's capital expenditure soared in the first quarter's earnings, with increasing year-on-year to 20%. Typically, capital expenditures are pro-cyclical. But capital expenditure has become more necessary now than before: supply chain challenges arising from the pandemic, emerging geopolitical risks, and ambitious promises of greenhouse gas emission reduction have all jointly pushed capital expenditure to record highs.
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