Bloomberg Daybreak: Asia Edition US Rally Wanes Ahead of Tech Earnings; Japanese Shares Advance
Jul 22, 2025
Sean Darby, Managing Director at Mizuho Securities Asia, shares insights on Japan's recent market performance and the impact of political changes following a significant election loss. Ed Butowsky, Managing Partner at Chapwood Investments, discusses the waning US market rally amid earnings season, focusing on tech giants like Nvidia, Tesla, and Alphabet. Both guests explore the implications of tariffs on various sectors and investment opportunities in artificial intelligence and bonds, offering a comprehensive look at the shifting economic landscape.
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Robust Earnings Beat Expectations
- Over 80% of S&P 500 companies beat earnings and sales estimates in Q2 despite lowered expectations.
- This highlights strong performance and effective management by CFOs in a challenging environment.
Tech Stocks Not Overpriced
- The "Magnificent Seven" tech stocks have reasonable forward P/E ratios except for Apple, which is weaker.
- This explains why current market highs lack typical overvaluation concerns for most tech giants.
Focus on GDP for Fed Moves
- Watch the GDP more closely than inflation for the potential of Fed rate cuts.
- A weak U.S. economy might prompt rate decreases as soon as next month.