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Big Tech still rules profit growth in US

Bets on the US stock market rally broadening out beyond a handful of tech behemoths this year are bumping into a familiar reality: Those same megacaps remain Corporate America’s most likely source of profit growth.

Tech’s fourth quarter earnings season kicks off this week with results from Netflix, Tesla and Intel. The so-called Magnificent Seven are expected to deliver combined profit growth of about 46%, according to data compiled by Bloomberg. That’s down slightly from the third quarter’s 53% expansion, but it still dwarfs almost all of the main sectors in the S&P 500 Index.

Considering how important these companies are to the overall stock market – they accounted for virtually all of last year’s 24% advance and drove the S&P 500 to an all-time high on Friday – earnings season doesn’t quite get going until they show up with their results. Bloomberg

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