Tech stocks led the way higher on Monday as investors braced for a heavy slew of corporate earnings reports due out this week.
About 20% of S&P 500 companies will release their quarterly results in the next five days, with the tech giant Microsoft (MSFT (opens in a new tab)+1.0%) and manufacturer of electric vehicles You’re here (TSLA (opens in a new tab)+7.7%) among notable names this week earnings schedule. But, the focus was on a big layoff announcement from the audio streaming service Spotify (SQUARE (opens in a new tab)+2.1%).
Today, Spotify announced that it will lay off 6% of its global workforce, or approximately 600 employees. In a memo sent to staff (opens in a new tab), CEO Daniel Ek said the job cuts were an effort to bring costs into line in a tough economic environment. This follows in the footsteps of several other technology and communication services companies like Microsoft, Metaplatforms (META (opens in a new tab)+2.8%) and Alphabet (GOOGL (opens in a new tab)+1.8%) than recently announced layoffs.
Selling power (RCMP (opens in a new tab)+3.1%) was another big gainer today after a report in The Wall Street Journal (opens in a new tab) said Elliott Management has taken a “big stake” in the software-as-a-service (SaaS) company.
Semiconductor inventories were also a pocket of strength. Advanced micro-systems (AMD (opens in a new tab), +9.2%) surpassed its peers after Barclays analyst Blayne Curtis upped the title from Equal Weight to Overweight, the equivalents of Buy and Hold, respectively. Curtis said AMD’s Genoa and Bergamo platforms will likely take market share from Intel (INTC (opens in a new tab)+3.6%), and believes the company could get a boost once Facebook’s parent company, Meta Platforms, increases spending later this year.
When it comes to major indices, the tech-heavy Nasdaq jumped 2.0% to 11,364, the widest S&P500 gained 1.2% to 4,019, and blue chips Dow Jones Industrial Average rose 0.8% to 33,629.
The safest Vanguard funds to buy
Today’s price action likely triggered a sigh of relief among investors. However, the fact remains that the major benchmarks are still in a bear market. And as the United States is expected to enter a recession later this year – Kiplinger, for his part, has the chances of a recession around 60% – stocks could remain in a downtrend for now.
While it’s true that this bear market will eventually come to an end, “investors shouldn’t assume that the market’s easy times will return,” 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 seek out high-quality assets,” like the best dividend stocks. Other defensive strategies include stocks in the healthcare and consumer staples sectors. Investors who want more diversification in their portfolio hedging have many options among the best bear market ETFs. But for those looking for below-average spending, consider the the safest Vanguard funds own in a bear market. The names featured by Vanguard offer short-term defense through a variety of strategies and come with low investment advisor costs to boot.