Why individual investors are cautious ahead of earnings for Microsoft, Amazon and the rest of the 'Magnificent Seven.'
Retail investors are trading cautiously ahead of earnings reports from 'Magnificent Seven' tech companies, including Microsoft, Amazon, and Alphabet. Their trading volume in these stocks has declined significantly, accounting for only 11% of total trading over the last week.
Retail investors are being cautious ahead of earnings reports from major tech companies. Microsoft, Meta Platforms, Alphabet, Amazon, and Apple will report their first-quarter earnings this week. These five companies represent about 25.8% of the S&P 500's market capitalization. Retail investors' trading volume in the 'Magnificent Seven' stocks has declined to 11% of total trading, a significant drop from previous years. The decline is part of a broader trend of reduced retail investor activity, which has been observed since the start of the Iran war. Retail investors' options positioning is also defensive, with a higher ratio of puts to calls, indicating a bearish outlook. They have been trading defensive sectors more actively, including consumer staples, utilities, and real estate.
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