Financial Insights
Weekly Update
US stocks were mixed Friday afternoon as treasury yields ticked higher, with markets still uneasy over the Fed’s next move, overshadowing an earnings season in full swing. The Nasdaq Composite, a broad index that is heavily weighted toward the important technology sector, posted a positive for the week. Stocks sputtered a bit as fresh questions arose over the Fed’s interest rate policy, and the markets look to gauge the next move in November. Markets were also bracing for the November US jobs report due next Friday.
Earnings Season– What You Need to Know
Multiple times a year, we discuss earnings season and the impact it can have on the stock market and, in particular, individual stocks. Let’s dive in and try to understand what this means…
Earnings season is a period when a substantial percentage of publicly traded companies release their quarterly results. It typically begins two weeks after the end of the quarter (in the middle of January, April, July, and October) and lasts approximately six weeks. While not all companies report during earnings season, many do, and investors as well as analysts often spend a lot of time scrutinizing the numbers as results roll in.
Here, we look at the three things that we track during earnings season:
Whether companies’ reported results are broadly in line with expectations across the market. This may seem obvious enough, but it’s worth noting if companies are showing patterns in a certain direction as compared to expectations.
How bellwether companies are performing. Certain companies and industries are thought of as “bellwethers”, meaning they’re considered broadly representative of the health of the stock market and overall business activity.
Individual earnings surprises. Just as it sounds, it’s important to note that surprises, whether positive or negative, can have a profound impact on the performance of individual stocks. Planning and preparing for earnings season consists of knowing what is expected of the stocks that are being tracked while also understanding that surprises can happen.
This gives you an idea of what earnings season means and what basic information to focus on as companies continue reporting earnings daily.
Max Rossiter is a native of Gilbert, AZ and a recent graduate of Arizona State University where he earned a Bachelor of Arts degree in Public Service and Public Policy from the W.P. Carey School of business. He comes to the team as a Financial Advisor Associate, focusing on providing financial guidance for the professional and private clients.
Jodi is originally from Redlands, California. She moved to Arizona in 1996 after receiving her Bachelor of Arts degree in Psychology from the University of Redlands. Her first job out of college happened to be as a receptionist at a small Broker/Dealer in Phoenix, and her interest in the world of finance was born. From receptionist, she moved on to larger firms and earned various securities licenses, working in Customer Service, Operations, Compliance, and finally, Trading.
Tim Carpenter started his financial career with Dean Witter 30 years ago. Tim serves as the Portfolio Manager and cornerstone of our Biltmore Wealth Management team. Tim’s primary focus on portfolio management provides a breadth of expertise and knowledge that enables the firm to manage risk and achieve financial goals for our clients.
Kevin is a native of Buffalo, NY, a graduate of Mercyhurst College (Erie, PA), and has been advising individual investors since 1999. Kevin focuses on providing financial strategies to the professional athlete.