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Market Watch Weekly | July 31st, 2020 | "Everything is Happening!"

Erik Dekker - Jul 31, 2020
Markets were higher on the week in what was a historic Thursday afternoon with Apple, Amazon, Google, and Facebook all reporting Q2 earnings. These four stocks account for 25% of the total value in S&P 500 index.

Markets were higher on the week in what was a historic Thursday afternoon with Apple, Amazon, Google, and Facebook all reporting Q2 earnings. These four stocks account for 25% of the total value in S&P 500 index. Aside from Google, it was a blowout quarter for these high-flying tech titans. Collectively the four stocks added approximately $200 billion (or the total GDP of Greece) to their total market cap on Friday, bringing it to more than $5 trillion combined (the equivalent GDP of Japan).

 

Big Tech has been the stalwart on Wall Street this year. Since the stock market bottomed on March 23rd, large cap technology companies have performed extremely well and most are at, or near all-time highs. However, the rest of the stock market hasn’t performed as well, with the average stock in the S&P 500 down roughly 10% for the year. As we discussed in last week’s note, the share price performance of technology sector is not comparable to the tech bubble of the 90’s. Rather, and as Thursday’s earnings show, the gains in this sector are well deserved as economies, jobs, and personal lives are becoming more digitized, more connected, and more automated. The mixing of the digital and physical worlds continues to get more complex, and the depth of this relationship will only continue to grow.

 

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