Relevance up to 07:00 2021-07-27 UTC+3
The value of shares of companies, and not only American ones, often largely depends on the financial statements. This relationship has always worked, but in the last year and a half, it was disrupted by the coronavirus pandemic. Simply put, the pandemic has greatly affected the economy, forcing governments around the world to rapidly print money to stimulate it. As there was more and more money in the economy, a certain part of it flowed to the markets. Some of it went to the stock market, some to the cryptocurrency market, and some to other markets. That is why we saw a record growth of bitcoin, which ended only a few months ago. That is why all three leading US stock indexes (S&P 500, NASDAQ and Dow Jones) continue to grow and update their absolute highs. In the American economy, every month, there is simply more money that needs to “settle” somewhere. Thus, the growth of the US stock indices, as well as the entire stock market, is now as smooth as possible. However, if we take the shares of individual companies, the picture is approximately the same. For example, Apple and Microsoft shares continue to update their price records, and Tesla shares cannot resume an upward trend due to the constantly changing rhetoric of Elon Musk regarding bitcoin and new lawsuits with the CEO of Tesla. But this week, investors can put aside all preconceptions and pay attention only to official financial information. After all, Tesla will report financial results for the second quarter today.
According to analysts at Bank of America, Tesla’s report for the second quarter will exceed all expectations and forecasts. The bank also believes that the current shortage of semiconductors forms a deferred demand for Tesla electric cars, which will be realized over the next few years. Most Wall Street analysts believe that Tesla shares should be bought now (about 38%), about 38% more believe that the carmaker’s shares should be held, while the rest believe that it’s time to sell. It should also be noted that Tesla shares, according to many experts, are highly overvalued by the market, so the company needs to show strong reporting from quarter to quarter, which justifies their current value.
This coming Tuesday, July 27, Apple will present its financial statements. Most experts are inclined to believe that the company’s shares will continue to grow and will amount to about $170 by the end of the year. The latest news suggests that Apple wants to shoot its movies and TV series in order to increase the amount of content for Apple TV. Experts also note high iPhone sales even during the pandemic. Most Wall Street experts believe that stocks should be bought or held. Only about 5% believe that Apple shares should be sold. Also, as in the case of Tesla, Apple shares are overvalued by the market.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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