Can We Finally Focus on Earnings?

With the market sentiment being dominated by global macro themes the past two weeks it is with pleasure that traders can finally focus on some stock specific catalysts this week! Earnings season “unofficially” kicks off with Alcoa’s report after the market close tonight. Alcoa (AA $10.00) would be almost an irrelevant stock for most traders since the company was removed from the Dow Jones Industrial Average back in 2013, except its corporate announcement schedule has always been the leadoff to each earnings season.

Toward the end of this week more highly traded stocks which report will be focused on the financials:

Thursday – JPMorgan Chase (JPM) will report

Friday we have a quartet of bigger financial names – Citigroup (C), PNC Financial Services Group (PNC), U.S. Bancorp (USB) and Wells Fargo (WFC) will all report.

It is not unusual for companies in the same industry to all report about the same time. Apparently no publically traded stock wants to have the spotlight solely on themselves. The financials will be particularly important to active traders listening for any forward looking comments referencing the anticipated headwinds from the Brexit decision. In addition to concerns about a European recession, or currency fluctuations and volatility, London has long been the financial center for the large banks for the euro-zone. Do they anticipate this changing and causing a hit to future earnings? Remember oftentimes the forward guidance is much more important to the price reaction of the shares than the actual reported results of the past quarter’s earnings.

Friday morning is a big economic release macro day. Additionally important on Friday the U.S. will release retail sales figures, the consumer price index (CPI) and industrial production for June. Globally, China will report second quarter GDP as well so even as earnings season kicks off the markets will keep an eye on the macro view and that likely will drive the overall sentiment. Specific stock earnings obviously can move those individual stocks but if the overall market sentiment is bullish, the rising tide will lift all boats or a bearish macro sentiment can drop them equally indiscriminately.

Platform tip:

Use the calendar function on your OH platform to view upcoming confirmed or estimated earnings. It is another way OptionsHouse puts you in control!


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