This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Potential Playouts for Earnings Season

This column was originally published on RealMoney on April 3 at 9:11 a.m. EDT. It's being republished as a bonus for readers. For more information about subscribing to RealMoney, please click here .

When trying to gauge the near-term setup, consensus fuels the flame of the analysis. Some fundamental meat, some psychological beans and some sentiment spice, and you've got yourself a spicy enough chili to make a New Mexican's forehead sweat. So what's the story with the three ingredients right now?

As I listened to CNBC and Bloomberg TV while getting ready for work this morning, I heard, for probably the 298th time in the past week, that profit earnings growth has slowed. Now that's a consensus sentiment. I happen to, for the first time in years, agree with that analysis, which is part of the fundie spice.

Of course, I remember arguing against that same consensus for each of the past three years around the onset of first-quarter earnings season, and the bears (mostly permabears, of course) have been dead wrong each time. Indeed, in tech and away from anything real-estate-related, earnings growth might very well come in with double-digit growth, extending the double-digit streak of double-digit growth. (Nice triple use of the word "double," huh? But I digress.)

What if earnings grow as steadily as they have for the past four years? This market would probably rally nicely, as the consensus about the fundamentals would be way under the reality of the fundamentals.

Meanwhile, if earnings are up about 3% to 5%, in line with what most say they expect, stocks are likely to have a very tough time rallying. Even as folks say they know earnings are slowing, if that reality hits hard this quarter, the guidance for next won't be pretty even as the consensus expects the second half to speed up again. The markets likely won't like estimates having to come down further for the second half of the year.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,040.92 -12.79 -0.07%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs