It was a heavy weak of earnings with wild after-hours trading as analysts digested the earnings reports. For example in the first ten minutes after Amazon.com (AMZN) reported its earnings on Thursday, the stock ranged from down $18 to down just $4.
Overall, over 70% of the companies have beat their earning’s estimates and just over 53% have beat on revenue. The earnings beat, so far, is the best since 2006 and was by far the best reading since the end of the bear market. Weaker revenue numbers have been a concern of many analysts and investors. The revenue has been in a gradual downtrend since the 4th quarter of 2009.
The best news last week came from Facebook, Inc. (FB) whose earnings surprised everyone as its stock gained 22% the day after its earnings were released. In this week’s trading lesson, I took an in-depth technical look at five of the tech giants. The market has not been kind to those that missed earnings as Expedia Inc. (EXPE) lost 22% on the opening Friday.
I also reviewed one of the tech industry groups that has been leading the market higher. It has clearly been a stock picker’s market as the market-tracking ETFs have not allowed many good risk/reward entry points.
My current concern for the stock market is what I see as the longer-term bullish outlook from many analysts. It is not that I disagree with them, but it is not a positive sign for the near-term market outlook. The periodic weaker-than-expected economic news has not dampened the enthusiasm but maybe the Eurozone will again shake up the market before the summer is over. Some negative news from the Eurozone could increase the bearish sentiment enough to fuel another phase in the market’s rally. But will it happen?
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