Earnings Season Begins Strongly, as the S&P 500 Nears Record Highs

Excerpt from Louis Navellier's Marketmail - 08/7/2018

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The daily oscillations in the stock market have been largely subdued due to stunning second-quarter results. Last week began with a flagship NASDAQ stock, Apple (AAPL), reporting better-than-expected sales and earnings on Tuesday. Many leading NASDAQ tech stocks are enjoying recurring service revenue from their cloud backup services, which continues to boost their sales and earnings. Although not all NASDAQ stocks pay a nice dividend or have predictable earnings, the fact that two NASDAQ companies - namelyAmazon.com and Apple - should each become $1 trillion market capitalization companies soon (Apple crossed $1 trillion last Thursday) is helping to boost investor confidence.

(Please note: Louis Navellier does not currently hold a position in Apple & Amazon. Navellier & Associates does not currently own a position in Apple & Amazon for client portfolios).

With the majority of stocks in the S&P 500 having announced second-quarter results, sales have risen at a 10.3% annual pace while earnings have risen at a 26.7% annual pace. Folks, this is stunning, because this means sales and earnings are running at 1.5% and 5.2%, respectively, above already-lofty expectations. Despite a currency headwind for many multinational companies, "peak earnings momentum" has not yet materialized. Although the remaining second-quarter S&P 500 earnings may decelerate a bit, there is no doubt that the second quarter will rival the first quarter as a record-high earnings announcement season.


In This Issue of Marketmail (Click Here to Read)

Bryan Perry takes a closer look at China and sees more than "currency manipulation" going on, perhaps some capital flight, which should drive China's leaders to the bargaining table. Gary Alexander looks beyond the monthly jobs report to two long-term trends - one positive, one negative - rising real wages and the disappearance of many prime-working-age males. From Bulgaria, Ivan Martchev weighs in on the emerging markets crisis, focusing on China and then Turkey. Jason Bodner signals the end of the Dog Days with a review of the rapidly-changing sector traffic patterns of summer, while I take a closer look at earnings trends and GDP in light of trade war rumors, along with an analysis of the latest ISM statistics..

 

Income Mail:  

Capital Flight Out of China - A Better Market "Tell"  

Is the Weak Yuan a Result of Manipulation or Something Structural?

 by Bryan Perry

  

Growth Mail:  

Ignore the Monthly Jobs Report: Look to Long-Term Trends Instead   

Where Have all the PWAMs (Prime Working Age Males) Gone?

by Gary Alexander

  

Global Mail:  

Welcome to the August Doldrums in Eastern Europe

The Dollar/Emerging Markets Empirical Test

by Ivan Martchev

 

Sector Spotlight:  

The "Dog Days of Summer" are Almost Over

Sector Rotations are More Rapid in the Summer Months

by Jason Bodner

 

A Look Ahead:  

Will Tariffs Help or Hurt (or Not Impact) Earnings and GDP?  

ISM Statistics Move Sharply Lower: Temporary or Worrisome?

by Louis Navellier