Earnings season officially started last week, but really there were only 3 reports of note (Alcoa, JP Morgan & Intel). This week things really will heat up with a slew of other important reports including; Apple, Citigroup, IBM, eBay, Goldman Sachs, Google, Wells Fargo and handful of other industrials and healthcare firms. Long story short, the reaction to this initial round of earnings reports will set the tone for the next few weeks.
If you stuck a gun to head and demanded that I give a prediction, then I would say this...the market is running pretty hot as it makes new highs coming into this earnings season. That means that expectations are lofty...maybe too lofty. That would make for a situation not unlike the last earnings season in October. There we had a 10% run up in stocks the month beforehand. Earnings were great, yet not great enough for many investors. So stocks churned sideways for a while.
The good news is that this fundamental strength was the main driver of stocks forging ahead to the highs we now find ourselves at. Meaning I expect a strong earnings season. I expect stocks to go sideways on the news in the short run. And then I expect them to head higher as people realize that improving corporate profits makes stocks a better place for their money than any other investment vehicle at this time.
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Executive VP, Zacks Investment Research
A Shocking Prediction for 2011
A wealthy U.S. businessman recently made a shocking prediction.
He says that over the course of one day next year, everything in America will change... the way we shop, travel, and even retire.
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While his next prediction actually has nothing to do with the stock market – it could change your life in ways you probably haven't yet imagined.
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Today's Top Stories: Tuesday- January 18, 2011
ZACKS RANK BUY STOCKS
- Aggressive Growth - PolyOne Corp. (POL) Q3 earnings per share came in at 28 cents, a nickel ahead of the Zacks Consensus Estimate. This was the fifth earnings surprise in a row. Read More...
Growth & Income - Expedia, Inc. (EXPE) reported third quarter earnings per share of 63 cents, beating the Zacks Consensus Estimate by 15%. Revenue growth was a stellar 16%. Read More...
Momentum - Souther Copper Corp. (SCCO) is worth its weight in copper, fresh off a new all-time high above $50 as copper prices continue to surge. Read More...
Value - Barrick Gold Corporation (ABX) analysts are still bullish on the company as gold prices hover near all-time highs. 1 estimate for 2010 was revised higher in just the last week. Read More...
Learn how to profit from our exclusive Zacks Rank stock-ranking system with free resources. Read More...
ZACKS MUTUAL FUND RANK
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Get yield with Thrivent High Yield A (LBHYX), Transamerica Partners High Yield Bond (DVHYX), Delaware High-Yield Opportunities A (DHOAX), John Hancock2 High Yield 1 (JIHDX) and Rydex High Yield Strategy A (RYHDX). Read More...
See all the great mutual fund resources.
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