Over 82% of S&P 500 Companies Have Surpassed Expectations
A Strong Beat Rate Signals Resilience - Four Indicators to Navigate Euphoria in the Busiest Week of the Earnings Season
The current earnings season is demonstrating remarkable strength so far, with a significant majority of S&P 500 companies reporting better-than-expected results. According to FactSet data, over 82% of the 169 S&P 500 companies that have reported their earnings to date have surpassed Wall Street's expectations. This high beat rate suggests resilient corporate performance amidst varying economic conditions. We'll closely watch what happens next week when Meta, Microsoft, Apple, and Amazon, some of the stocks I track weekly, report their earnings.
Also from the stocks tracked in this publication, Google reported strong advertising revenue, showcasing resilience in its core business and helping to bolster investor confidence; the stock jumped 4,38% during the week, following the bullish setup analyzed one week ago.
However, Tesla, one of the most followed stocks in the U.S. stock market, reported a second consecutive quarter of declining auto sales, raising concerns despite strong demand and production capabilities. Its market share in Europe fell for the sixth straight month, dropping to 2.8% in June from 3.4% a year ago, adding scrutiny to its growth trajectory. Adding to Tesla's challenges, reports emerged about the Trump administration’s plans to roll back the U.S. push for cleaner vehicles. The impending expiration of the $7,500 EV tax credit at the end of September could indirectly raise the cost of Tesla vehicles, further impacting sales. Additionally, traditional carmakers will no longer need to purchase EV regulatory credits from Tesla, as the administration intends to halt fines for missing emission standards. This change threatens to eliminate a significant source of revenue for Tesla.
Economic data releases during the week, including strong job numbers, supported the narrative of economic stability and growth. As a result, major indices like the S&P 500 (SPX), Dow Jones Industrial Average (DJI), and Nasdaq Composite (NDX) all experienced upward momentum.
Today’s agenda includes the following charts as usual: SPX, VIX, NDX, Dow Jones, IWM, SMH, GLD, SLV, TLT, BRK.B, PLTR, NFLX, GOOG, AAPL, TSLA, NVDA, META, MSFT, AMZN, and Bitcoin. If you trade some of those securities, this publication is for you.
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And of course, the Support and Resistance Levels for next week, including over 40 securities:
This edition highlights the four essential indicators to monitor throughout the week, helping you either maintain confidence in the bullish momentum or shift into a defensive mode. Some companies like INTC and IBM have fallen after earnings reports, so let’s be cautious and vigilant using four indicators to monitor bullish momentum or a quick sentiment shift.
This is the third consecutive July exhibiting a bullish overextension, and indeed the fourth if the 2022 bear market is factored in. The question remains whether this August will escape the turbulence observed during that month over the past four years.
Let’s begin
SPX - Getting Close to my Bullish Target Charted Months Ago