Prospects for 2022 Tech Earnings
In my last piece, I noted that although the stock market was in the midst of a correction, the market’s movements were more emotional and fundamentals still looked strong in big tech. The S&P 500 is trading its cheapest since before the pandemic, with a current P/E ratio of about 25.6. Earnings and revenues are projected to grow year-over-year for Q1 2022 by close to 4% and 10% respectively. The “great re-opening” took longer than expected in the United States, and with almost all states having no remaining COVID restrictions in place, companies should be reporting growth in Q1 as we inch back to normalcy.
Inflation and supply chain constraints will continue to be a theme in the coming quarters, and forecasts may be a bit muted in lieu of those themes. However, fundamentals in big tech remain strong and will look to provide support for a resurgence in their respective stock prices. The coming weeks’ earnings reports will be telling not only for the Q1 revenue numbers, but perhaps more importantly how they forecast the coming year and beyond.
OpenMarkets is an online magazine and blog focused on global markets and economic trends. It combines feature articles, news briefs and videos with contributions from leaders in business, finance and economics in an interactive forum designed to foster conversation around the issues and ideas shaping our industry.
All examples are hypothetical interpretations of situations and are used for explanation purposes only. The views expressed in OpenMarkets articles reflect solely those of their respective authors and not necessarily those of CME Group or its affiliated institutions. OpenMarkets and the information herein should not be considered investment advice or the results of actual market experience. Neither futures trading nor swaps trading are suitable for all investors, and each involves the risk of loss. Swaps trading should only be undertaken by investors who are Eligible Contract Participants (ECPs) within the meaning of Section 1a(18) of the Commodity Exchange Act. Futures and swaps each are leveraged investments and, because only a percentage of a contract’s value is required to trade, it is possible to lose more than the amount of money deposited for either a futures or swaps position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles and only a portion of those funds should be devoted to any one trade because traders cannot expect to profit on every trade. BrokerTec Americas LLC (“BAL”) is a registered broker-dealer with the U.S. Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc. (www.FINRA.org), and is a member of the Securities Investor Protection Corporation (www.SIPC.org). BAL does not provide services to private or retail customers.. In the United Kingdom, BrokerTec Europe Limited is authorised and regulated by the Financial Conduct Authority. CME Amsterdam B.V. is regulated in the Netherlands by the Dutch Authority for the Financial Markets (AFM) (www.AFM.nl). CME Investment Firm B.V. is also incorporated in the Netherlands and regulated by the Dutch Authority for the Financial Markets (AFM), as well as the Central Bank of the Netherlands (DNB).
