• The Nasdaq 100 index pulled back from record levels after FAANG earnings
• For the wider market, investors expect a 74% YoY growth rate in earnings
• Apple, Netflix and Intel see their 2H growth rates slowing due to economic reopenings and shortages

The peak of earnings season is marked by strong Q2 results from FAANG companies (Facebook Apple, Amazon, Netflix, and Google). Many big tech companies have warned investors that they may see slower growth rates and lower margins in second half. However, their stock prices dropped after the results were published. Because pandemic winners are now seeing their growth rates normalize due to increased demand for outdoor activities and economic reopening. A worldwide shortage of chips is another problem. This could limit the upside potential of Nasdaq 100's attempt to reach new heights.

For the broader market, 261 S&P 500 companies have reported results so far. With an average positive earnings surprise of +21.9%, 89% have outperformed Street forecasts. According to Factset, the S&P 500 will record a 74% YoY blended earnings growth rate in Q2. It will be the highest rate for more than a decade if 74% is the real number.

Keep checking DailyFX for additional earnings updates. Click HERE to download out quarterly equity forecasts.

In the future, the market's attention may shift to the US nonfarm payrolls report and the rising number of Covid-19 cases due to the Delta variant. The number of US coronavirus cases has increased in the last week, with the Delta variant accounting for more than 92%. Investors were disappointed by the latest weekly initial jobless claims data, which showed a fragile rebound in US labor markets and may increase the Fed's dovish stance.

The Citigroup Economic Surprise Indicator (CESI), which measures the strength of the global economy's recovery, has shifted to negative territory. This is a surprise as it was the first time since June 2020. Pandemic risks and slowing growth may reduce investors' appetite for risk and encourage profit-taking over the coming weeks.