So, the earnings beating season has begun...

[ASusilovic]

where are the negative "suprises"...

Regional U.S. Banks May Report Record Drop in Profit


Investors may end up disappointed by upcoming earnings reports from smaller banks. "While last week's numbers from some financial giants were well received, a large number of smaller regional banks may have a harder time impressing markets given their exposure to the still-weakening commercial real estate sector,"

 

[wartrace]

Don't worry, the earning will not be as bad as the "could" have been which will add more fuel to the rally.

 

[1flyfisher]

Wallstreet analysts know exactly what earnings will be. They are tied into the companies so well they know exactly what is going on and what earnings will be down to pennies. One of the games wallstreet/analysts play is by lowering earnings estimates well below what will be reported by the company. This is done to give the appearance the company is doing well and "Beat Earnings Estimates"
Year over year comparisons are what is more relevant.
The bulk of companies are doing poorly.

 

[Kassz007]

Quote from 1flyfisher:

Wallstreet analysts know exactly what earnings will be. They are tied into the companies so well they know exactly what is going on and what earnings will be down to pennies. One of the games wallstreet/analysts play is by lowering earnings estimates well below what will be reported by the company. This is done to give the appearance the company is doing well and "Beat Earnings Estimates"
Year over year comparisons are what is more relevant.
The bulk of companies are doing poorly.

YOY earnings means nothing to traders because the stock market is looking forward. YOY earnings could plummet yet the stock still rises due to future expectations of higher earnings. How does one determine the future expected earnings? Analyst estimates are a good place to start.

If you think analysts are lowballing the estimate, then buy the stock. When the company beats, it will rise = you make money.

 

[1flyfisher]

Depends on your approach to trading. Some traders do choose to analyze fundamentals of a co and want a complete and accurate financial view of the co prior to entering a position. Some could care less what the financial position of a co is.

Either case your last 2 sentences are accurate and I should have made that point. Thanks for doing it for me.

 

[piezoe]

Quote from Kassz007:

...
If you think analysts are lowballing the estimate, then buy the stock. When the company beats, it will rise = you make money.

Well, sometimes yes, and sometimes no. I wouldn't count on that.

 

[Kassz007]

Quote from 1flyfisher:

Depends on your approach to trading. Some traders do choose to analyze fundamentals of a co and want a complete and accurate financial view of the co prior to entering a position. Some could care less what the financial position of a co is.

Either case your last 2 sentences are accurate and I should have made that point. Thanks for doing it for me.

Fundamentals do matter for some strategies; absolutely.

 

[Kassz007]

Quote from piezoe:

Well, sometimes yes, and sometimes no. I wouldn't count on that.

Of course nothing is a sure thing, but the odds of price going higher are certainly upped after a beat.