I Want To Do Something Special For You Today…
How about a little Friday fun?
In a short video update, I talk in depth about what I’m seeing in the markets!
Today, I talk to you about the first 100 days of stock market performance under the new president, the performance in the world equity index, how continued Fed assistance might impact stocks, and more!
This is definitely something you don’t want to miss, so click below to get started!
Keep it In the Money,
Trading Tip of the Day: Don’t Get Caught in the Earnings Chop…
Every earnings season, I get the same question from traders: The earnings were strong! My company beat expectations! But shares are down – what happened?!?
We’re right in the middle of earnings season right now but earnings reports aren’t dominating the financial news these days. Even though this was a big week for earnings, there are plenty of other headlines to spook investors.
Also, every novice trader eventually learns that beating earnings-per-share estimates by a penny or two is not a guarantee that the stock will soar.
You must remember that the market is forward looking. But earnings are simply a snapshot of past performance from the prior three months. When you bet on a stock, you’re betting on its future potential. You’re effectively making a prediction as to how the company will perform in the months and years ahead — not last quarter.
That’s not to say that investors don’t care if a company is exceeding expectations. They do! The market is just much more interested in figuring out if good times will continue.
Given the multitude of forces in the market including reopen optimism, rotations in and out of certain sectors could affect a stocks ability to bounce off an expectations beat.
It’s always better to do your due diligence and speculate on more than just a guess that a company will beat earnings expectations!
— Greg Guenthner