One hundred and sixty-four companies report earnings this week. It will be a test of whether hard data and soft data are on speaking terms, or if sentiment surveys got way too carried away with Trump’s talk of regulatory rollbacks and tax cuts.
It looks like we are on the right track.
Of the 99 companies that have reported so far, 81% have beaten the earnings estimate and 70% have beaten the revenue estimate, notes John Schlitz, chief market strategist for Chaikin Analytics.
“We also get a seasonal boost from the back-half of April, which is typically more productive than the first-half,” he says in a note to subscribers this morning.
Looking at the Chaikin platform for Monday, their three bullish bets for beating the market are Ameriprise Financial (AMP 435,77 +0,96 +0,22%), Sanmina Corp (SANM 60,32 +0,32 +0,53%) and Kimberly Clark (KMB 126,05 -0,26 -0,21%). The system is most bearish on companies like HealthStream Inc. (HSTM 25,35 +0,14 +0,56%), Halliburton (HAL 40,98 +0,02 +0,05%) and NuStar Energy (NS 22,53 +0,03 +0,13%) to name a few.
Their screen is more red than green, just so you know.
For Tuesday’s earnings, some of the bull bets are JetBlue Airways (JBLU 7,09 +0,06 +0,85%), Juniper Networks (JNPR 36,97 -0,21 -0,56%) and First Industrial Realty (FR 51,78 -0,04 -0,08%). Bears include Caterpillar (CAT 371,98 -0,09 -0,02%), Freeport-McMoRan (FCX 49,47 -1,27 -2,50%) and Rite Aid (RAD 0,65 -0,13 -16,81%).
Over the last trading week, investors were taking a pause on the Trump trade, and pricing in geopolitical risk, says Schlitz. The engine was sputtering out, he says, and needed some new torque. For Monday, that torque power came from the French elections with status quo candidate Emmanuel Macron narrowly beating Trump-like Marine Le Pen by two percentage points. None of this is hard data, though. And so the S&P 500 this week will be dependent on earnings.