Technology stocks rose on Monday as investors braced for a big batch of corporate earnings reports due this week.
About 20% of S&P 500 companies will report their quarterly results in the next five days, with the tech giant Microsoft (MSFT (opens in new tab)+1.0%) and a manufacturer of electric vehicles Tesla (TSLA (opens in new tab)+7.7%) among the notable names this week earnings calendar. But the focus was on the big announcement of the cancellation of the audio streaming service Spotify (PLACE (opens in new tab)+2.1%).
Today, Spotify said it will lay off 6% of its global workforce, or about 600 employees. U memo sent to staff (opens in new tab), CEO Daniel Eck said the job cuts are an effort to streamline costs amid a challenging economic environment. This follows in the footsteps of several other technology and communications services companies such as Microsoft, Meta Platforms (TARGET (opens in new tab)+2.8%) i Alphabet (GOOGL (opens in new tab)+1.8%) that recently announced layoffs.
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Salesforce (CRM (opens in new tab)+3.1%) was another big gainer today after the report in the The Wall Street Journal (opens in new tab) indicated that Elliott Management had taken a “major stake” in the software-as-a-service (SaaS) company.
Semiconductor stocks were also a pocket of strength. Advanced Micro Devices (AMD (opens in new tab), +9.2%) outperformed peers after Barclays analyst Blaine Curtis upgraded the stock to Overweight from Equal Weight, the equivalent of Buy and Hold, respectively. Curtis said AMD’s Genoa and Bergamo platforms are likely to take away market share Intel (INTC (opens in new tab)+3.6%), and believes the company could get a boost when Facebook parent Meta Platforms ramps up spending later this year.
As for the main indices, technologically heavy Nasdaq jumped 2.0% to 11,364, which is wider S&P 500 gained 1.2% to 4,019, and blue-chip Dow Jones Industrial Average increased by 0.8% to 33,629.
The safest Vanguard funds to buy
Today’s price action probably caused a sigh of relief among investors. However, the fact remains that the main benchmarks are still in a falling markets, falling stocks, falling prices. And amid expectations that the US would enter a recession later this year – Kiplinger, for its part, did prospects for recession at around 60% – shares could remain in a downward trend for now.
While it’s true that this bear market will eventually end, “investors should not assume that easy times in the market are coming back,” says David Bahnsen, chief investment officer at wealth management firm The Bahnsen Group. “We expect increased volatility and a focus on cash flow and quality for the foreseeable future.”
As such, Bahnsen says it’s “very important to aim for high-quality assets,” such as best dividend stocks. Other defensive strategies included targeting stocks in the health care and consumer staples sectors. Investors who want greater diversification in the protection of their portfolio have many options among them the best ETFs in a bear market. But for those looking for below average costs, consider Vanguard’s safest assets to own in a bear market. Names featured by Vanguard offer short-term protection across a variety of strategies and come with low investment advisor fees to boot.