AMZN, AAPL, GOOGL and FB report earnings on Thursday – what should we expect?
Thursday will be a big day in the Q3/2020 earnings season with the big tech companies Amazon, Apple, Facebook and Alphabet, the parent company of Google, presenting their numbers to market participants.
So, what can we expect and, more interestingly, how will the Nasdaq100 react to the numbers?
The lawsuit against Google could hurt Apple
After having significantly outperformed the SP500 CFD in 2020, Amazon and Apple, being up more than 70% YTD and 50% YTD respectively, will be carefully watched by traders.
Facebook and Alphabet will also be cautiously reviewed after the US Department of Justice filed an antitrust suit against the two companies last week, calling them "monopolies". So far, the stocks respective investors seem to not care a great deal, as both names have gained, despite these suits. As it seems, investors seem to view these lawsuits as a sign that these tech companies will likely emerge even stronger from the difficult post-Corona lockdown environment.
Here are the expected earnings per share:
- Facebook: $1.89
- Alphabet: $11.18
- Amazon: $7.25
- Apple: $0.71
But, if numbers disappoint on Thursday after the market has closed, given the weight of these four names that, combined, amount to more than 30% in the NQ100 CFD, the US tech sector, especially the Nasdaq100, could see an acceleration of the already bearish move which started on Monday.
Such a disappointment, especially in case of Apple can't be completely ruled out: since Apple pushed back the launch of its new 5G iPhone due to the Corona pandemic, initial sales of it won't be included in fiscal fourth quarter earnings, making it more difficult to deduce expectations for the new smartphone.
In addition, in the earlier mentioned lawsuit against Alphabet/Google, Apple has received up to $12 billion per year in high margin licensing fees from Alphabet for setting Google as the default search option on iPhones.
If the lawsuit now shows that antitrust policies have indeed been violated, Apple could see a significant hit to its upcoming earnings.
That would leave the NQ100 CFD vulnerable to an accelerated move on the downside.
How can you trade NQ100 CFD in this environment?
While the Nasdaq100 remains bullish above the SMA(200) and with a clear sequence of higher highs and lows on the daily time-frame, traders will potentially spot the failed attempt to penetrate the former All-Time highs around 12,470 points, pointing to a forming double top.
While such a double top would only be confirmed if the Nasdaq100 drops below its September lows around 10,670/700 points, it seems possible that traders will see at least another attempt to break 11,000 points, which would then level the path down to 10,670/700 points.
Source: Admiral Markets MT5 with MT5SE Add-on [NQ100] CFD daily chart (from June 27, 2019, to October 28, 2020). Accessed: October 28, 2020, at 10:00 PM GMT. Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of the NQ100 CFD increased by 7.8%, in 2016, it increased by 8.4%, in 2017, it increased by 30.5%, in 2018, it fell by 1.6%, and in 2019, it increased by 39.7%, meaning that in five years, it was up by 108.5%.
Discover the world's #1 multi-asset platform
Admiral Markets offers professional traders the ability to trade with MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level than with MetaTrader 4. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5!
Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The analysis is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
- Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
- To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
- Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures that refer to any past performance is not a reliable indicator of future results.
- The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
- Any kind of previous or modelled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.