Sunday, April 28, 2019

Earnings Season Signals

While Q1 earnings season has a ways yet to run, enough companies have reported at this point for us to begin gleaning general market signals from the results.

Of the over 500 stocks so far reporting, in terms of earnings beating analysts' expectations, so far so good:

As for revenue beats, however, not so good (so far):

In terms of immediate-term signals, the stock price reactions thus far to beats vs misses support the somewhat skeptical tone I've been sounding of late. Note how the current-season average 1-day price change (red) in response to earnings beats, earnings misses, and for all stocks reporting compares to the historical average:

While one-day price moves are never actionable long-term investment signals, the latest do confirm other short-term indicators that have me guarded in my immediate-term assessment of market conditions.

Charts source: Bespoke Investment Group

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