This Day On The Street
Continue to site
ADVERTISEMENT
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

The Day Ahead: Earnings-Season Rage-Out

It's strange how humans evolve, especially those special folk we call "stock handicappers." At the age of 21, I didn't know what an earnings season was in theory or in practice. At 23, I was eagerly learning the ins and outs to identifying corporate bull on earnings calls and post-call follow-up chats -- and sleeping on top of a conference room table, unbeknownst to anyone else. Four years later, I didn't begin the process of shutting out all of humanity -- for their own safety -- until two weeks into earnings season.

Now, at 30 -- which is really 60, as anyone close to me would know -- I am finding myself highly sensitive at the very start of earnings season. For me, it's "game on or die." Invest the time to amass information, or risk being that slacker who's repeating their three taking points on UPS (UPS) because they chose a night on the town instead of an evening with an earnings-call transcript. Hey, play on, playa.

With regard to this particular earnings season (which apparently is irrelevant), my more rugged, hardened self is testing old rules of thumb, in addition to monitoring trends, to be sure the market is not beginning a fresh rally based right under my nose.

Honest Abe's Rules of Thumb: Cliffs Notes Edition

"Relative outperformance of higher growth sectors, supported by indications of accelerating macroeconomic trends, is a sign of changing future fundamentals."

Many eyes have turned to data improvement in September vs. August as packing the punch to reactivate the rally. On Tuesday, the new dot-connecting exercise was that upside in industrial production meant a manufacturing employment revival -- which had lagged -- and, along with it, longer workweeks and checks to offset gas inflation. All in, this was to drive a very merry holiday season.

The industrial and retail complexes percolated in the face of subpar earnings from W.W. Grainger (GWW), WD-40 (WDFC) and Wolverine Worldwide (WWW). There are some mighty rosy assessments here, but it still doesn't sit well with me, seeing as TJX Cos. (TIF - Get Report) has plunged, and it's absurdly clear that Europe's industrial performance was horrendous, causing a double-whammy of missed third-quarter earnings and lowered expectations for the balance of the year that exceeds the third quarter shortfall. So I render this rule of thumb as not being truthfully satisfied.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free

Markets

Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs