EarningsBeats.com Digest for October 9, 2019
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It's Time To Kickoff Earnings Season
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This is my favorite time of the quarter. We've just had our Q4 Market Outlook webinar so we have a pretty good idea of what we want to look at in terms of trading candidates and what we expect from the market. But there are always the "unexpected" earnings reports and guidance - both positive and negative - to help shape the direction of the next several weeks and where to expect new
leadership to emerge. That's the exciting part. Also, we never quite know where to expect the biggest surprises. Banks ($DJUSBK) could be one area. While everyone is "talking" badly about the group, the shrinking yield spread, etc, we need to remember that the stock market looks ahead. So if market participants begin to sense that the yield spread will widen again, we'll see a major push into banks and other financials. The first big report of earnings season
will be on Friday morning as Citigroup (C) kicks off earnings season. Let's look at the chart and see what Wall Street thinks as we approach their announcement:
C isn't one of the best performing banks, but it's certainly not one of the worst either. So we should be able to glean some information not only from their report, but also from the market's reaction to their report. If the report is less than stellar and C is able to hold up above recent price support, then the worst is likely behind the group. But the opposite could be true if C's report is better than expected, yet we don't see a
commensurate move higher.
This one will be interesting, especially after yesterday's surprisingly low PPI readings.
Happy trading!
Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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