Here's a guide on what to watch and one of the best Web sites to go to, during the stock market earnings season. For a breakdown of the months included in each quarterly report and to see how earnings reports affect a stock's price, read How Earnings Reports Affect Stock Prices & Why You Should Care.
Last week the stock market was bumpy, due to the global political tensions in the Middle East and Ukraine. This coming week should see a recovery and a smoothing, as long as nothing dramatic happens, either globally or locally. The second-quarter 2014 earnings season, among other strong market influences, has so far pushed markets upward.
Earnings Report Summary for First-Quarter 2014 and part of Second-Quarter 2014 Here is an earnings report card for first-quarter 2014 and second-quarter 2014 earnings so far. Second-quarterearnings have not yet been reported by all companies. Courtesy of Fox on Stocks Courtesy of Fox on Stocks So far 53% of the companies beat earnings expectations while 20% of the companies that reported missed expectations. This trend is fueling the overall market toward positive trading results, and allows the tech market in particular to rely on the strength of the overall economy. Earnings predictions for Apple, Facebook, Amazon and Netflix are overall positive. Apple's earnings are expected to be strong, due to the large number of iPhone sales in the quarter. Apple is expected to have great guidance on next quarter's earnings due to the release of the iPhone 6. Date of Apple quarterly earnings report release: Tuesday, July 22, 2014, after the close. Facebook is predicted to report a gain after a notable increase in mobile ad revenue. Do you remember when people were doubting Facebook's ability to monetize on mobile and the stock price tanked? Not anymore. Facebook had a 25.4% increase in stock price from the start of the year. Many are predicting positive earnings to continue its bullish trend. Date of Facebook quarterly earnings report release: Wednesday, July 23, 2014, after the close. Amazon has a slightly lower expectation than the other tech stocks. There is a large number of people who support positive earnings but some still remain on the fence. Amazon Fresh, Dash and other creative innovations keep Amazon on the cutting edge and allow them to maintain and increase earnings, quarter over quarter and year after year. Read about Amazon's ability to innovate, an ability that allows them to continue to deliver not only books and food and just about everything else, but also to increase earnings as well. Date of Amazon quarterly earnings report release: Thursday, July 24, 2014, after the close. Netflix has strong metrics every which way you can scope it out and has been on a strict bullish rip upward to a price of around $440 because of those strong metrics. Many predict positive earnings -- including Jeff Macke. And when Macke talks, people listen ---> Jeff Macke Interview Date of Netflix quarterly earnings report release: Monday, July 21, 2014, after the close. Tech Technicals The tech stock that seems to have the most promising outlook is Apple. It has been holding strong above the 200-day moving average since mid April and has very strong relative strength. Its overbought/oversold value is settling right along the centerline of the graph, but it seems to have continuing momentum upward.
Earnings season is always a fun time. It adds an element of "mine field" to an already very explosive market. As a hard and fast rule, I avoid trading stocks whose earnings are close to being reported. However, many traders love predicting and playing earnings. The return on trading with those levels of risk can be very high. For those who want to trade stocks off earnings, or at least track what's happening with earnings very closely, I recommend using MarketGrader.com. With this site, you can see breakdowns of company earnings, sector earnings, past quarter earnings and more -- everything you want to know when entering into earnings season. Paying attention to earnings breakdowns is important because it reminds us to keep an eye on the root of the stock market direction and as many investors and traders know, trading right along side of the overall market direction tends to lead to positive returns. For this next coming earnings season, be prepared and however you play earnings season, I wish you many happy returns. Rachel
At the time of publication the author had no position in any of the stocks mentioned. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
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