What's going on?

Roll up, roll up, ladies and gentlemen: companies representing a third of the US stock market�s value will tell investors this week how they performed last quarter � but it�ll be tech firms taking center stage.

What does this mean?

Investors are expecting US companies� first-quarter revenues to be much the same on average as they were last year, and profits to be 16% lower. And while coronavirus is behind a lot of the decline, it�s also responsible for some industries performing better than the rest: namely tech, which � alongside healthcare and consumer staples � is expected to report rising quarterly profits.


Last week, investors heard that Netflix scored an expectation-busting 16 million new subscribers as folks stayed home. That same tailwind will probably help Amazon and Microsoft, whose respective retail business and productivity businesses have benefited from an increase in online shopping and remote working. And while Facebook and Google-parent Alphabet will be hurt by less advertising, some analysts still think they�ll end up earning more than they did last year.

Why should I care?

For you personally: You can run, but you can�t hide.

Weighing in at over 20% of the US stock market � which in turn represents about half the global stock market � tech stocks have the potential to significantly influence its overall direction and, no matter where you�re based, your investments. So even the most passive investors among you with cash sitting in a robo-advisor or pension pot might find your investments� values affected by tech earnings this week.

For markets: Heavy is the head.

A recent Goldman Sachs report noted that the biggest five companies (four of which are tech) now represent a larger share of the US stock market than ever in recent history (tweet this). That suggests the stock market�s recent recovery hasn�t actually been driven by as many companies as you�d expect after a dramatic selloff like the one in March � and that tech stocks may single-handedly be propping things up.