Is the Market Bullish on Earnings?

Posted by | April 23, 2019 | Newsletters | No Comments

The Week on Wall Street

A short and relatively placid trading week wrapped up Thursday, with the major indices turning in mixed performances. The S&P 500 retreated 0.08%, the Nasdaq Composite advanced 0.17%, and the Dow Jones Industrial Average gained 0.56%. The MSCI EAFE index, tracking foreign stocks in developed countries, added 0.65%.1, 2, 3, 4

Nothing really catalytic emerged to drive the market last week, and volumes were low.

Earnings Season Update

More than 78% of S&P 500 firms reporting so far this earnings season have surpassed analyst expectations, according to FactSet. Since guidance tends to be conservative, there is the possibility that more companies will beat forecasts than expected.5

The initial public offering market remained strong. Two high-profile technology companies came public on Thursday and were met with enthusiasm from investors. As mentioned in recent weeks, 2019 could be a banner year for IPOs.

Retail Sales Rebound

March’s 1.6% gain was the biggest monthly advance seen since September 2017. Sales of cars and gasoline rose more than 3%.

If the upcoming March consumer spending report is also impressive, concerns about the current business cycle peaking may recede.6

Final Thought

Nearly 800 companies will report earnings this week, including some high-profile names. This kicks off five weeks of active daily earnings reports.

Investors will watch corporate profits, guidance, and fundamental indicators with great interest, to try and glean whether the economy is strengthening or softening. Reports on first-quarter economic growth and existing home sales will command particular attention.

I was on Fox Business with Maria Bartiromo discussing Banks. Steve Forbes was also on set with me:

WATCH THE CLIP

Sources

The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2014 Emerald Connect, LLC