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Big Tech Catches COVID

Posted July 26, 2022

Matt Insley

By Matt Insley

Big Tech Catches COVID

Investors are drinking from a firehose of market news this week. 

More than a third of S&P 500 firms report earnings… The Fed will meet on Wednesday to announce interest rate policy… and GDP numbers are about to drop. 

Any one of those three events would be enough by itself to push the market dramatically up or down. We’ve just got a few days to make sense of it all. 

As I check prices right now, stocks are hovering at 5-week highs. It feels almost like Wall Street is itching to press the “buy” button and jump back into risk assets. 

Don’t get carried away.

Let’s zoom out and look at where we are…

chart

Source: Twitter @suburbandrone

Tech earnings plus rate hikes is a bad combination for the tech-heavy Nasdaq.

Those big drawdowns are all within the past year. 

I don’t know if it will go down another 20% or 30% after the events this week. 

But it is clear that any stock gains over the last several weeks could be wiped out in a flash. 

In volatility like this, it pays to play it smart.

Today, let’s catch up on what tech earnings can tell us…

Send your opinions to, TheRundownFeedback@StPaulResearch.com

Your Rundown for Tuesday, July 26, 2022...

Economic COVID

For more than a decade, we were conditioned to see tech stocks head in one direction. 

Remember that feeling that high valuations were divorced from economic reality?

As far-fetched as some analyst estimates were, they were based on real-world business plans and performance.

With the economy in chaos, it’s not just higher interest rates that are bursting the tech bubble. The soft underbellies of some of these companies have been exposed. 

So far this quarter, the highest-profile tech name that’s been bloodied by earnings is social media company Snapchat.

In the aftermath of its report, Snapchat (SNAP) fell 40% on Friday. 

Here’s what our analyst Zach Scheidt had to say after the painful sell-off: “Remember, SNAP's true customers are not the users who post pictures or record silly videos. 

“Their customers are actually corporations who spend money on ads and sponsorships.”

Brace yourself for Facebook parent Meta’s reporting on Wednesday then… 

Barton Crocket of Rosenblatt Securities told CNBC that in terms of revenue, Meta is in the same place as Snap. But he added, “Snap is in a stronger position in terms of user growth.”

Ouch. Facebook is in a worse position than the company that just took a 40% nosedive?

You can no longer sit on big-name tech stocks to secure and grow your wealth. Learning to adapt as we see the events unfold this week is critical. 

One thing is clear: In this new higher interest rate environment, when the real economy sneezes, big tech catches COVID-19. 

So tomorrow, we’ll bring you analysis on the GDP forecast. As I mentioned up top, we’re going to find out if we’re “technically” in a recession… and how the mainstream media will try to spin it. 

Market Rundown for Tuesday, July 26, 2022

S&P 500 futures are in the red, down 0.38%. 

West Texas Intermediate Crude is up 1.33%.

Gold’s holding steady (-0.1%)

And Bitcoin is still holding on above $20,000, after falling more than 4%.

Send your comments and questions to, TheRundownFeedback@StPaulResearch.com

For The Rundown,

Matt Insley

Matt Insley
Publisher, The Rundown
TheRundownFeedback@StPaulResearch.com

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