| Today's Takeaway is by Myles Udland, Head of News. There's a lot riding on results from Alphabet (GOOG, GOOGL) and Microsoft (MSFT) out later today. But the market's reaction to last week's earnings report from Netflix (NFLX) may have eased the pressure on what members of the "Magnificent Seven" have in store for investors this week. Data from FactSet highlighted by Yahoo Finance's Josh Schafer in Sunday's Morning Brief showed how much heavy lifting the Magnificent Seven companies, minus Tesla (TSLA), are expected to do for the S&P 500 this earnings season. This group of six companies — Alphabet, Amazon (AMZN), Apple (AAPL), Meta (META), Microsoft, and Nvidia (NVDA) — are expected to report earnings growth north of 50% during the fourth quarter. The rest of the index should see earnings, collectively, fall 10.4% from the same quarter last year. In the first quarter, the trend gets even more overwhelming. These six giants are set to report year-over-year earnings growth of 70%; the rest of index should see 0.3% growth, according to FactSet. Seen one way, the market is being propped up by the earnings power realized by a handful of giants riding the AI trend, dominating the global smartphone market, and exerting duopolistic control over the digital ad space. Seen another way, expectations are so low for the balance of the S&P 500 investors could be quick to reward results from the rest of the market. Which brings us back to Netflix. Shares of the streaming giant last week rose over 10% after Netflix grew subscribers more than expected in the fourth quarter and told analysts current quarter earnings would be higher than Street forecasts. This reaction also came as Netflix reported fourth quarter profits that fell shy of expectations. Every company with any analyst coverage is subject to the logic of "beating estimates" relative to these expectations. And every company has their own story to tell investors. In the case of Netflix, subscriber growth reaccelerating as it rolls out ad-supported tiers and cracks down on password sharing has become the bull case for the stock. Were the company to have missed these growth targets and cautioned on the benefits these initiatives are providing in pursuit of this target, investors may have judged the stock more harshly. Aggregate tailwinds can only take a stock so far. Ultimately, management needs to deliver on its promises. But the reception Netflix earned from the Street shows the willingness investors have in this environment to reward execution. With 25% of the S&P 500 having reported earnings through last Friday, John Butters's team at FactSet found earnings beats are being rewarded more than average while misses are being penalized less than average. And how this trend holds up as the remaining 75% of the index reports over the coming weeks might have more to say about the market's overall direction than results from the companies most responsible for actual earnings growth. | 
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