Survey Monday
Earnings season is upon investors. Where will stocks be at the end of the current quarter?
• Higher (more records are in store)
• Lower (due for another pullback)
Take the survey here and don’t forget to share your thoughts in the WSB comments section.
Needs to be strong
Second-quarter earnings are on tap, with a week full of reports from companies in many different sectors. Tuesday will see the big banks publish their numbers, such as JPMorgan (JPM) and Wells Fargo (WFC), while Wednesday will feature the healthcare industry and semiconductors, including Johnson & Johnson (JNJ) and ASML (ASML). Even more diversity is on tap for Thursday and Friday, with figures from Netflix (NFLX), GE Aerospace (GE), PepsiCo (PEP), and American Express (AXP). See the full schedule
Backdrop: Stocks recently logged a major comeback, hitting fresh record highs after getting shaken by “Liberation Day” tariffs only months earlier. Trade deals are starting to be inked with some of America’s largest trading partners, though uncertainty remains amid threats to Japan, the European Union, and others. Macroeconomic data this week will also be important, with releases ranging from the consumer price index to retail sales.
Earnings season can also give a new impetus to equities. The biggest tailwind for S&P 500 (SPY) companies is likely to be the weak dollar, given that the group makes around 40% of its revenue from international markets. Lowered estimates mean that it’ll be easier for corporations to post beats, while expectations of lower interest rates and more certainty can show up in guidance.
SA commentary: “While overall tariff rates are already at a very high level (compared to recent history), these haven’t lifted long-term inflation skepticism to new highs. Furthermore, Trump’s ‘One Big, Beautiful Bill,’ which has been signed into law, promises to deliver a further boost to the U.S. economy, albeit at the cost of higher long-term fiscal debt,” Investing Group Leader JR Research writes in We Better Hope Q2 Earnings Don’t Disappoint. “Despite the S&P 500 reaching new highs, only 63% of stocks are above their 200-day MA, highlighting a worrying bifurcation in market breadth. Market valuations are elevated, with the S&P 500’s forward earnings multiple now above 22x, so strong Q2 earnings and guidance are critical.” Take the WSB survey.
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