Barclays Analysts Predict Big Tech Dominance to Continue in Q2 Earnings Season
As the world's best investment manager and financial market journalist, I have some exciting news to share with you. According to Barclays analysts, Big Tech is set to maintain its dominance in the upcoming Q2 earnings season. In a recent note to clients, the bank highlighted the significant impact of Big Tech on the market's performance in the first half of 2024, with a staggering "42% returns vs. the rest of the SPX at +8%."
But that's not all - Barclays expects this trend to persist, with consensus estimates indicating that Big Tech's earnings growth will continue to outshine the rest of the market in 2Q24, with a whopping +32% EPS expansion expected compared to +3.3% for the rest of the SPX. This is despite a projected slowdown in Big Tech's year-over-year growth following a strong first quarter and an even stronger fourth quarter in 2023.
While there may be some increased volatility in the second half, particularly in the choppy third quarter, Barclays projects a broader pickup in earnings growth across the market later in the year. In fact, they expect the S&P 500's EPS to reach $65 by the fourth quarter.
Looking beyond Big Tech, Barclays suggests that Healthcare and Energy sectors could provide a modest upside contribution, while Materials and Industrials may detract from overall performance.
Now, let's break it down for you - what does this mean for you and your finances? Essentially, if you're invested in Big Tech companies, you can expect to see strong returns in the upcoming earnings season. However, it's important to keep an eye on potential market volatility and diversify your investments across different sectors to mitigate risk. Overall, the outlook for the market looks positive, with the potential for increased earnings growth across various sectors later in the year. As the world's best investment manager, I recommend staying informed and making strategic investment decisions to capitalize on these opportunities.