Wall Street “Ready” for Busiest Earnings Week in Years

Wall Street “Ready” for Busiest Earnings Week in Years

Wall Street “Ready” for Busiest Earnings Week in Years

$SPY, $XOM, $GOOGL, $AMZN, $MSFT

Corporate America is set to kick off its biggest profit-reporting season in at least 10 years this week, with more than 190 members of the S&P 500 index delivering Quarterly reports, according to S&P Dow Jones Indices data.

The lineup accounts for around 40% of the benchmark index’s value, or more than $7.7-T, and includes big names like Google’s parent Alphabet Inc (NASDAQ:GOOGL), Amazon.com Inc (NASDAQ:AMZN), Microsoft Corp (NASDAQ:MSFT) and Exxon Mobil Corp (NYSE:XOM).

The report’s deluge could keep US stock investors’ focus  on earnings this week even as the world’s attention may be elsewhere.

Many strategists have attributed the 10% rally in the S&P 500 since Donald Trump’s victory over Hillary Clinton in the November 8 US presidential election to optimism President Trump would boost the domestic economy through tax cuts and an infrastructure spending binge.

That action drove market valuations recently to their highest since Y 2004, even with little progress in Washington on the fiscal policy front.

Some other anxiety-provoking events have grabbed headlines, including unsettling relations with North Korea and this weekend’s election in France, which has a bearing on the country’s membership in the EU and its single currency, the Euro.

Upbeat earnings from Morgan Stanley (NYSE:MS)  and other banks so far this reporting period cushioned those geopolitical worries, helping push the S&P 500 up 0.9% last week, its best performance in 2 months.

Shares of smaller companies did even better, with S&P’s benchmark indexes for small and mid-cap stocks notching their best weeks of Y 2017, with gainers of between 2 and 3%.

Expectations for the Quarter’s profit growth have risen too

Q-1 now appears set to mark the strongest quarterly earnings growth in more than 5 years.

In the last week alone, expected S&P 500 Q-1 EPS growth rose to 11.2% from 10.4%, a more than 7% spike, according to Thomson Reuters data.

“This week definitely has proven that the Street likes earnings – it’s controllable, it’s U.S.,” said a senior index analyst at S&P Dow Jones Indices.

Just 76 companies reported last week compared with 134 in the comparable week a year ago he said.

This week’s rush will represent a 15% increase from the 166 S&P components that reported in the comparable week last year.

This Thursday will be the busiest day with nearly 70 reports due, including updates after the closing bell.

That could make for a Bang in the market on Friday, which is also the final trading day of April.

Symbol Last Trade Date Change Open High Low Volume
NYSEArca:SPY 234.59 21 April 2017 -0.75 235.25 235.31 234.13 110,360,300

 

HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Neutral (-0.06) Bearish (-0.30) Bearish (-0.25) Bullish (0.38)

Have a terrific week.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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