It’s one of the oldest cliches in investing, but often happens in real life, and not just on scuttlebutt. The anticlimactic reaction to good news, including earnings, can be very frustrating.
Earnings are the mother’s milk of valuations – it ultimately dictates where stocks and markets go. But there is the moment of truth when selling greets great news. This has been the case more in recent years than the past.
Sometimes, it’s a sense this is as good as it gets. But even when management alerts investors to stronger forward-looking guidance, the knee-jerk reaction is selling.
That’s where we are right now. Consequently, it’s the NASDAQ taking the biggest hit of major equity indices after Tesla (TSLA) initially rallied on a solid report, but then turned lower.
Pulling back and spying a one-year chart, the move seems so infinitesimal, but when you are in the midst of the battle, it feels like there is no benefit of a more sober view. For now, NASDAQ could come down a lot more until hitting and testing 14,419. I don’t think that happens, but it’s not a long shot.
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After the Close: More earnings results from some of the largest companies in the world.
- Apple (AAPL) has been routed in the week after positioning financials the last two times (-4.7% and -4.3%)
- Microsoft (MSFT) was slammed -5.7% in the week after its last earnings results
- Alphabet/Google (GOOG/L) has an amazing track record of moving higher after positing results, but expectations are higher
- Visa (V) is one of my favorite fintech names – been waiting for pullback to get in
- Starbucks (SBUX) is regaining lost swagger with the recent breakout but could be initially tested on the downside
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