Its shares are up 4% in premarket trading.

(MSFT), which also reported results on Tuesday, said its revenue rose 18%. Looking ahead: Not all earnings have been cause for concern. Tech stocks, in particular, start to look less appealing. At the beginning of 2022, it was near 1.5%.Īs yields on safe debt rise, investors start to rethink riskier gambles on the future earnings of companies. The yield on the benchmark 10-year US Treasury note is now at 2.76%.

Rising rates: Yields on US bonds, which move opposite prices, have jumped this year in anticipation of the Fed’s plan to raise interest rates. “Clearly, as we’re recovering, we need Chinese demand,” Onuekwusi said. That’s bad news for the rest of the world. Growth is also slowing sharply in China, the world’s second largest economy, as the country tries to limit the spread of coronavirus. In a report titled “Why the coming recession will be worse than expected,” its economists said it’s “highly likely that the Fed will have to step on the brakes even more firmly, and a deep recession will be needed to bring inflation to heel.” But if it’s too aggressive in raising rates, it risks sending the US economy into a recession, which would further weigh on corporate earnings.ĭeutsche Bank, which earlier this month became the first major bank to forecast a US recession next year, said Tuesday that it now expects a “major” downturn. “They don’t tend to miss their earnings, so I think that was the big shock for markets,” Justin Onuekwusi, Legal & General Investment Management’s head of retail investments, told me.Įconomy fears: The Federal Reserve is yanking support for the economy to fight the highest inflation in four decades. Shares fell more than 3% before the report on Tuesday and are down another 4% in premarket trading on Wednesday. (GOOGL)’s full-year sales growth for 2021 came in at 41%. (GOOGL) said Tuesday that its sales growth in the first quarter slowed to 23%, slightly below Wall Street’s forecasts. Last week, Netflix’s earnings catastrophe sent its shares plummeting. Now, Wall Street is giving these companies another look amid doubts they can maintain the momentum needed to justify their high valuations. Their businesses proved resilient, and investors - flush with cash thanks to efforts by central banks to prop up the economy - rushed to capitalize on their rapid growth.

Earnings: Stocks of Big Tech companies soared after the 2020 market crash.

Spotify stock plunge