So far, the Q4 2022 reporting season has left a mixed impression, with only 67% of the S&P500 companies launching Q4 2022 results that positively surprised the market. But as the US 10-year Treasury yield has declined from 4.2% in October 2022 to 3.5% today, tech stocks historically valued with high P/E ratios should benefit the most.
As a swifter reopening scenario for China has become more probable, US stocks with significant Asian revenue exposure, such as Qualcomm, NVIDIA, Tesla, and Dupont, have outperformed the rest of the S&P500 companies with less foreign sales exposure. When viewing S&P500 tech companies, Intel Corp's share is trading at levels not seen since late 2015. Given their 44% revenue exposure to China and a weakening USD against the Renminbi, the Intel share could get support in Q1-Q2 2023 as the sales outlook improves from the region.
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