JPMorgan's Kolanovic points to tech company balance sheets

The earnings reports of major tech companies due this week will play a big role in determining whether valuations are sustainable, according to JPMorgan Chase strategist Marko Kolanovic. Investors are pricing in the prospect of large-scale profit growth for major tech companies, JPMorgan Chase’s pessimistic equity strategist Marko Kolanovic wrote in a note on Monday. As long as the stock market continues to be driven by tech companies, U.S. companies will outperform Eurozone companies, Kolanovic said. Three companies with a combined market value of more than $10 trillion — Apple, Microsoft and Alphabet — are set to report earnings this week. In addition to those three companies, the so-called “Magnificent Seven” — which include Amazon, Nvidia, Meta and Tesla — are trading at a 34% premium to the index based on expected earnings, according to data compiled by Bloomberg. These companies have also been driving the recent rally.