The Balance Today: News You Need To Know on Oct. 24, 2022

thebalancemoney.com:

Markets are mixed today ahead of more earnings from some of the world’s biggest companies. This week could be one of the busiest this earnings season, with a third of S&P 500 companies set to report earnings. Investors will pay particular attention to the tech sector, with Apple, Google parent Alphabet, Meta, Amazon, and Microsoft all reporting this week. Their results could give insight into how they have been performing in this rising interest rate environment. 

Tech stocks are particularly sensitive to higher interest rates because they tend to have higher price-to-earnings ratios and low or no dividend payments. Higher rates lower the present value of their expected cash flow, taking a bite out of expected future profits, and driving stock prices lower. Investors also tend to look for dividends or interest payments from fixed-income investments during times of economic uncertainty. 

Investors have loved tech stocks throughout the pandemic, and if you were one of those who snapped up some of these stocks, your portfolio has probably been struggling. So expect more volatility this week depending on what these companies report. And if your investments are all in the tech sector, this might be a good time to consider more diversification to spread out your risk. 

In what could be a sign of an economic slowdown, the private sector is putting the brakes on its manufacture of goods, according to today’s Purchasing Managers’ Index (PMI) data from S&P Global. The PMI is a measure of business activity in the United States, and looks at a variety of things, from the number of new orders businesses are taking, to the cost of materials and items needed to manufacture new goods.

Today’s PMI output index dropped to 47.3 from 49.5