Wall Street Week Ahead: Lofty US stocks leave investors punishing earnings disappointments
stocks are leaving investors with little tolerance for disappointment, raising the stakes ahead of a week in which two more technology and growth giants are set to report.
Strong reports from Microsoft and Google parent Alphabet on Thursday helped propel the S&P 500 to its biggest weekly gain since early November following its first 5% pullback of the year. The S&P 500 is up about 7% in 2024 and some 24% since late October.
But investors punished a disappointing forecast from Meta Platforms. The Facebook parent's stock tumbled over 10% on Thursday after its report. A sales warning saw shares of industrial bellwether Caterpillar fall 7%.
More broadly, S&P 500 companies that have topped analyst earnings estimates this quarter have seen their shares outperform by a median of just 0.2%, JPMorgan strategists said. By contrast, those that have missed earnings estimates have had their shares lag by a median of 4%, the biggest such underperformance for misses in at least eight years.
Earnings reports have been «pretty good,» said Rick Meckler, partner at Cherry Lane Investments. But «anyone that's missed in any way is paying a pretty heavy price.»
More earnings are in store in the coming week from the so-called Magnificent Seven group of companies that drove markets higher last year. Amazon reports on Tuesday and Apple on Thursday. On Wednesday, the Federal Reserve will release its latest monetary policy statement after concluding its two-day meeting.
Some believe the market's nearly unabated run higher over the past
