Daily Management Review

Amazon And Apple Raise Expectations As Investors Prepare For A Slowdown


Amazon And Apple Raise Expectations As Investors Prepare For A Slowdown
Apple and Amazon added almost $175 billion to their combined market worth after strong earnings reinforced investor confidence in their ability to weather an economic slump.
While analysts emphasised that these companies are not immune to broader economic challenges, they added that a drop in consumer spending is unlikely to push them into the red, calling them "always trustworthy to buck the trend."
Amazon's stock climbed over 11 per cent to $135.50 after the e-commerce behemoth anticipated positive third-quarter revenue, while Apple's stock rose more than 3 per cent after the company indicated demand for iPhones remained robust despite customers' tighter spending.
"The results are good enough to support Apple's stock which has done much better in the current market rout, further justifying the company's 'safe haven' status when the going gets tough," Haris Anwar, Investing.com analyst, said.
The stock market's hyper-expansion in the last decade has been driven by high-growth and megacap corporations, but rising interest rates to combat decades-high inflation, as well as a rapid rally in the dollar, have taken their toll since the beginning of the year.
Earlier this week, positive earnings from Alphabet and Microsoft soothed investors who had been burned by a drop in their stocks during the first half of the year.
Amazon, like much of the retail business, is bracing for a drop in consumer spending as individuals seek lower-cost necessities to tide them over until the economy improves.
The e-commerce behemoth's brisk cloud business, along with an expansion of service offerings, is likely to mitigate the impact of rising expenses.
Paul Nolte, portfolio manager at Kingsview Investment Management, was more suspicious in light of warnings from certain large retailers, including Walmart.
"We think that the consumer is not as strong as maybe portrayed by the reaction to Amazon."