Sticks will likely hit new records in the week ahead if earnings keep topping expectations


The stock market in America is close to an all-time high. The S&P 500 and the Dow Jones Industrial average are within 1% of their all-time highs while the Nasdaq is within 2% of its all-time high.

The indexes received a big boost because almost all companies that revealed their results this week had grown in terms of profit margins. They also received a boost from the rumours Brexit deal and the US-China trade negotiations. Near to 24% or 120 of the S&P 500 companies are going to declare their quarterly results this week. Some of the big companies include Amazon, Intel, McDonald’s, Caterpillar and Boeing all of which are going to declare their quarterly results this week.

About 14% of the companies that continue the S&P 500 index have reported by Friday. 81% of these companies had beaten the expectations of the analysts. Citigroup and Bank of America had posted good returns in their earnings. While Netflix rallied at 7% before closing up by 2.5%, Morgan Stanley improved by 1.5% and Coca-Cola climbed by more than 1% on Friday after releasing their quarterly results.

But the investors in America may not gain as much as many of these companies have foreign exposure and thus have many offshore investors. Companies like Caterpillar are heavily affected by the ongoing trade war between the US and China. The third quarter is crucial as the results of 2019 have not been so much encouraging due to the economic slowdown fuelled by trade disputes and the tariffs. Exports had reduced and so have the imports due to the higher tariffs set by the US, China and some European nations on various goods.

The good news for the investors going into the third quarter is that the US-China trade war seems to be coming towards an end as both countries have shown signs to have talks regarding the matter.

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