The most important two weeks of the third quarter have arrived. I’m talking about earnings season.
Earnings season happens at the beginning of every quarter and it’s when the 500 largest companies in the US report results for the previous 12 weeks. These companies also share guidance on future sales and earnings.
Earnings season is always important – but this time around it’s going to be even more important.
Investors are eager to learn more about how COVID-19 has impacted corporate sales and earnings. And just as important – how do companies expect to perform for the rest of the year?
Earnings season is going to be closely watched – and the results and guidance will likely drive stocks for the next 12 weeks.
If we get some good news stocks have a good shot at taking out the all-time high. If we get disappointing results and guidance it will be a headwind for stocks.
Investors should have plenty of information to digest in the next few weeks. A flurry of companies will be reporting.
Here are some more details from CNBC.
Big tech names, including Microsoft, Intel, Twitter and IBM, are among companies reporting in the week ahead, as is high-flying Tesla. Blue chips Coca-Cola, Verizon, American Express and Travelers are also among the dozens of major companies releasing results.
Earnings and fiscal debate could be catalysts for stocks in the week ahead
In the meantime the S&P 500 is looking solid. The leading index has seen a huge rebound off the 52-week low from mid March.
Right now shares are pressuring the 5-month high from June 8. If the S&P 500 can clear this key level of short-term resistance I am expecting a quick burst back to the 52-week high. If the S&P 500 falls back I see plenty of support directly below. At the most I see 3%-5% down side from here with a much higher probability of moving higher.
Take a look at the S&P 500 chart – this is a 1-year chart.
The Big Picture on Q2 Earnings Season and COVID-19
This is an important earnings season because it’s the first since COVID-19. I am expecting the results and guidance to drive the stock market for the next 12 weeks. Overall I am expecting good things and I expect the S&P 500 to hit a new all-time high in the next few weeks. I view any weakness or dips in the stock market as an opportunity to buy low.
Disclaimer: This report is for entertainment purposes only. Every investor should consult with an investment advisor before making investment decisions. The Vodicka Group, Inc. is not a broker/dealer. We do not receive compensation for mentioning stocks. At various times, the clients, publishers and employees of Vodicka Group, Inc., may buy or sell the securities discussed for purposes of investment or trading.
