Skip navigation Scroll to top
Scroll to top

LGT Navigator: Tech heavyweights shine in the middle of the corona crisis

July 31, 2020

The quarterly results of Apple and Amazon showed that the two tech giants were able to benefit strongly from the online shopping boom during the corona crisis. Google's parent company Alphabet and Facebook, on the other hand, did not do quite as well, but their quarterly figures still largely exceeded market expectations. The unprecedented collapse of the world's largest economy, as well as the largest European economy, in the second quarter impressively demonstrated the extent of the corona crisis. Meanwhile, against the backdrop of the dramatic pandemic situation, US President Donald Trump tweeted about postponing the presidential election in November.

Quarterly earnings of tech giants in the spotlight

The major tech groups, Apple and Amazon, made billions in profits in the second quarter and in most cases significantly exceeded market expectations. Amazon in particular benefited massively in the last quarter from the lockdown-related Internet shopping boom. At USD 5.2bn, net income was roughly twice as high as in the same period of the previous year, despite the fact that Amazon had to invest USD 4bn in Q2 for corona measures such as protective equipment, cleaning and premiums. Apple's iPhone sales rose +1.7% year-on-year to USD 26.4bn, exceeding the market consensus of USD 21bn. Apple's consolidated sales rose +11% to USD 59.7bn in Q2, a record quarter. Net income grew +12% to USD 11.25bn. Facebook, on the other hand, grew at a much slower pace than before as customers placed less advertising on the platform during the crisis. This was compounded by a boycott call from civil rights groups, as a result of which large companies temporarily stopped advertising on the world's largest online network. Google's parent company Alphabet suffered a decline in revenues for the first time in Q2 and was primarily burdened by higher costs and declining advertising revenues.

Meanwhile, Republicans and Democrats in the US Congress continue to argue over the design of the new corona aid package. Time is pressing, as the Corona grants for millions of unemployed Americans will expire at the end of this month ­ today, that is.

On the New York Stock Exchange, economic concerns prevailed after the US economy recorded a historic slump in the second quarter, according to initial estimates. The Dow Jones Industrial, the leading US index, closed -0.85% lower at 26 313.65 points. During the trading day, however, the leading index even lost around -2% at times. The negative trend on Asian stock markets continued at the end of the week. In Tokyo, the Nikkei 225 Index lost just under -2.5%.

US economy crashed in the second quarter

The US economy experienced an unprecedented slump in the second quarter. Gross domestic product collapsed by -32.9% extrapolated for the year as a first estimate by the Department of Commerce in Washington showed. Due to the lockdown, consumer spending in particular collapsed (-34.6%). Economic output had already fallen by -5% in the first quarter, meaning that the US economy is now in recession. In view of the escalating corona crisis in the United States, it is highly questionable whether the world's largest economy will be able to recover as early as the third quarter. The US labor market is not sending good news. The weekly number of first-time applications for government unemployment benefits rose by 1.434 million last week, up from 1.422 million the week before.

At the same time, Mexico's GDP fell by -17.3% in Q2 compared to the previous quarter.

Covid-19 causes historic slump of the German economy in Q2

The German economy recorded the sharpest slump ever measured, given the practical standstill during the corona-related lockdown. Between April and June, gross domestic product fell by -10.1% quarter-on-quarter, the sharpest decline since quarterly calculations began in 1970. Economists had assumed an average decline of around -9%. In Q2, both exports and imports as well as services had slumped massively. Since German economic output had already fallen by -2% in the first quarter compared with the previous quarter, Europe's largest economy is thus technically in recession.

Against the backdrop of the corona crisis, the Austrian economy also collapsed in Q2 by -12.8% compared to the previous quarter.

Economic Indicators July 31

MEZ Country Indicator Last
07:30 FR GDP Q2 (q/q) -5.3%
10:00 IT GDP Q2 (q/q) -5.3%
11:00 EZ GDP Q2 (q/q) -3.6%

Earnings Calendar July 31

Country Corporate Period
SZ Swatch H1
SZ Swiss Re H1
FR BNP Paribas H1
FR Vinci H1
FR GDF Suez H1
UK BT Group Q1
UK British American Tobacco H1
US Merck & Co Q2
US DuPont Q2




LGT helps you make informed investment decisions

All about global economic and market trends at a glance

Subscribe to LGT's research newsletters

Follow us on TwitterFacebook or LinkedIn, where we inform you about latest market developments and LGT News. Further informationen is available on: LGT Social Media.

Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 83 48, E-Mail:
Source: LGT Bank (Switzerland) Ltd.

Risk Disclosure (Disclaimer)
This publication is an advertising material / marketing communication. This publication is for your information only and is not intended as an offer, solicitation of an offer, or public advertisement to buy or sell any investment or other specific product. Its content has been prepared by our staff and is based on sources of information we consider to be reliable. However, we cannot provide any confirmation or guarantee as to its being correct, complete and up to date. The circumstances and principles to which the information contained in this publication relates may change at any time. Information that has been published should therefore not be understood as implying that no change has taken place since its publication or that it is still up to date. The information in this publication does not constitute an aid for decision-making in relation to financial, legal, tax-related or other consulting matters, nor should any investment decisions or other decisions be made on the basis of this information alone. It is recommended that advice be obtained from a qualified expert. Investors should be aware that the value of investments can fall as well as rise. Positive performance in the past is therefore no guarantee of positive performance in the future. Investments in foreign currencies are also subject to fluctuations in exchange rates. We disclaim all liability for any loss or damage of any kind, whether direct, indirect or consequential, which may be incurred through the use of this publication. This publication is not intended for persons subject to legislation that prohibits its distribution or makes its distribution contingent upon an approval. Any person coming into possession of this publication shall therefore be obliged to find out about any restrictions that may apply and to comply with them. In line with internal guidelines, persons responsible for compiling this report are free to buy hold and sell the securities referred to in this report.

US employment growth remains dynamic at the beginning of the year