Will Alphabet & Microsoft EPS Reports be affected by NIKE & LULU problem?

During Michael Markowski’s Saturday July 20, 2024 weekly session (view recording) he provided the rationale for why Amazon, Microsoft and Alphabet will eventually be affected by the same systemic problem that has negatively impacted the share prices for NIKE and lululemon athletica by 59 and 44 percent respectively.  

Microsoft and Alphabet will report second quarter earnings after the close today, Tuesday July 23rd. Amazon will report after the close on Thursday July 25th.    

Michael’s chart below confirms that the share prices for Lehman, Bear Stearns and Merrill Lynch throughout 2007 were the leading indicators for what happened in 2008. They could have been utilized to predict the S&P 500’s decline to its 1997 level.  

The three brokers reached their all-time highs by February 2007.  The S&P reached its 2007 high in October 2007. By November of 2007 the shares of the brokers had declined by as much as 46 Percent. The share prices of the brokers proceeded to their final lows by September 15, 2008. Six months later the S&P reached its low.

In his session Michael also explained (view recording) that the 2007-2009 and 2022-2024 periods share a common trait. Each had or have a systemic problem which did and will negatively affect many of the S&P’s member companies. 

Another of Michael’s charts below depicts the divergence between the S&P 500 and the share prices for Nike and also lululemon athletica. Similar to the brokers in 2007, Michael says that the two iconic global consumer discretionary products companies are the leading indicators for why the S&P 500 is headed for multiyear lows.