See It Market: Big Tech Results Initially Spook Investors, but Stocks Hold Up
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Despite some headline misses in big tech, markets ended the week with a significant rally and the Dow realized its fourth consecutive winning week.
Heading into Q3 earnings season analysts significantly lowered the bar to adjust for headwinds from inflation to the strong dollar, and a majority of S&P 500 companies have surpassed those EPS estimates (71%), although less than the 5-year average. According to FactSet the market is rewarding positive earnings surprises more than they are punishing negative earnings surprises.
While the mega-cap misses from Alphabet (GOOGL), Microsoft (MSFT), Meta Platforms (META) and Amazon (AMZN) have been front page news as well as their plunging stock prices, many other well-known names were able to miss expectations and bounce back. Take two Industrials for example, 3M (MMM) and Whirlpool (WHR). 3M missed revenue estimates when they reported before the open on October 25, but after a brief pre-market dip closed the week up 7%. On October 20, Whirlpool missed significantly on the top and bottom-line, by 7% and 16%, respectively. They ended last week up 5% from that initial post-earnings collapse.