US technology stocks in China: Microsoft, Alphabet and Visa

Inflation and lockdowns are falling heavily on US technology stocks in China and numerous investors are re-evaluating their portfolios. Here, then, is how the quarterly reports of Microsoft, Alphabet and Visa are going.

Moreover, in China, some circumstances - such as the 500 container ships waiting to dock in the ports of Shanghai - had not even occurred during the previous lockdowns. Obviously, we must not overlook the fact that the war in Ukraine and Russia which cuts off the gas to Poland and Bulgaria further puts Europe in difficulty, which is already under pressure due to an unprecedented increase in the cost of living which is likely to bring the recession across the continent. Without forgetting that the market is suffering from an increasingly aggressive American Central Bank, convinced as it is that inflation is no longer transitory but stronger and at a higher level than initially thought.

The effect of this situation is evident in US equities with Tuesday’s session where Nasdaq 100 futures were down by up to 5.5%, below 13,000 points before rebounding and closing above 13,000. Some of the larger stock indices highlight a major retracement occurring for Tier 1 companies (high-quality, high-margin companies): 37 stocks with a market value of over $ 5 billion that are down more than $ 5 billion. 50% this year. These are companies that were recognized by all as the triumphalers during the pandemic and that at the moment, given current expectations, are losing a lot of ground, reminding us of the collapses that took place after the dot-com bubble. The performance of our thematic basket this year also shows the long tail of losses in the growing segments of the equity market. It is a good opportunity to remind investors what works during inflation: real estate, commodities, gold, defense, cyber security.

US tech gains could be a major test for the stock market and essentially decide whether large-cap US tech stocks would get confirmation that they are a good hedge against inflation.