Today, April 21, as of 3 p.m. New York time, the major indexes were on track to break their three-day losing streak. At 3 p.m. the Standard & Poor’s 500 was ahead 0.65% and the Dow Jones Industrial Average had gained 0.74%. The NASDAQ Composite was higher by 0.73% and the small cap Russell 2000 had moved up 1.94%. Why the big change in tone from earlier in the week?
Earnings season will accelerate this week with reports from Coke, Johnson and Johnson, Snap, and Netflix
The week ahead could well bring even less volatility and even more complacency as we move into what everyone expects to be a stellar earnings season–at least in comparison to the first quarter of 2020
The big question is how much of the huge year over year earnings growth in the first quarter is already priced into stocks. And how much more of a rally can we expect on expectations for even higher year over year earnings growth in the second quarter.
Today, I’m going to review the fundamental case for Wyndham shares (the reason I added it to Jubak Picks on March 17) and give you the details on the Call Option on Wyndham that I’ll be adding to my Volatility Portfolio tomorrow.
This week will bring positioning for what’s looking like a record quarter for earnings growth for the first quarter of 2021 that’s likely to keep the stock market trend pointing upward. The first earnings report for the quarter are due from the big banks on April 14 and 15.
On April 1 FactSet reported that the bottom-up analyst earnings projection for the stocks in the Standard & Poor’s 500 for the first quarter had climbed 6% as the quarter itself progressed. That’s the biggest increase in analyst projections since FactSet began tracking quarterly bottom-up earnings estimates in the second quarter of 2002. Normally, analyst estimates slip downwards as the quarter progresses with the average decrease of the last five years at 4.2%
What we’re looking at the the possibility of an almost unbelievable surge in earnings in the first quarter of 2021, the second quarter, and for the whole year–caused by year-to-year comparisons with the pandemic recession in these quarters of 2020.
…earnings season to heat up after the big banks kicked off reporting on Friday. Tuesday brings more bank earnings from Bank of America (BAC) on Tuesday and Morgan Stanley (MS) on Wednesday before we move to big players in other sectors including Procter & Gamble (PG), Intel (INTC), and Netflix (NFLX).