Last Quarter Is Going to Be Hard to Beat

While Alcoa (AA) reported earnings on Wednesday, no other key names are set to report until next Tuesday. On Tuesday morning, Goldman Sachs (GS) will report, and Intel (INTC) will report after the close that day.

Heading into this earnings season, expectations are very high because last quarter's stellar numbers are the freshest in investors' minds. As shown below, the average US stock that reported went up 1.70% on the first trading day following its report. (For companies that report in the morning, we use that day's change, while we use the next day's change for companies reporting after the close.) The next closest quarter was +0.90% in Q1 '03. The market did extremely well following the strong numbers in Q1 '03, so the bulls like to compare that quarter with last quarter.

While the positive results hopefully mean that last quarter was indeed a turnaround one for both earnings and the market, investors hoping for a repeat performance are probably wishing for too much. Let's all be happy if we get any gains.

Comments

[TeresaE:]

Stellar?

So profits by deception (financial) and multimillion dollar losses, the slashing of millions of customers (for that is truly what layoffs are) is "stellar"?

What would you call a food riot?

A rambunctious party?

Jul 11 08:44 AM

[Mad Hedge F...:]

Watch out for stocks. Every once in a while I stumble across a chart which is so clear, so vivid, so unequivocal in its implications, that it lifts the investment fog. This is that chart. Drawn up by stockchart.com’s Arthur Hill (see www.madhedgefundtrader... ), it shows that we are going to spend the rest of our summer probing for the bottom right hand shoulder in a screamingly obvious “head and shoulders” pattern. It gives a range of possible bottoms from 850 all the way down to 666 by the end of August. The chart fits my own fundamental scenario like a hand in Michael Jackson’s glove (see “The Worm Has Finally Turned” at www.madhedgefundtrader... ). Soaring unemployment, terrible earnings reports, collapsing commodity prices, a catatonic consumer, real estate of every flavor in free fall, and tidal waves of government spending are not what bull markets are made of. Did I mention the weather is terrible? Every feeble, half hearted, low volume rally we saw this week pushed us closer to the edge of the cliff. The charts of every stock and commodity market in the world, rolling over in lockstep like a thirties Busby Berkeley musical, gives you all the smoking gun confirmation you need. Hold on to those shorts as if your life depended on it.

Jul 11 03:02 PM

[Vienna:]

Still running after the reports. I do find it quite hard to believe that anyone could take this seriously after following all the reports that have been posted lately.
There are just too many negative signs out there as to keep the party running.
The compound interest system needs a reset once in a while.

Jul 12 06:08 AM