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What To Expect From The Crazy Earnings Season Ahead

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Netflix reported disappointing subscriber growth and underwhelming Q3 expectations in its earnings release last night. This morning the stock tumbled over 7% as investors reassess this stock’s fair valuation.

Is this a foreshadowing of what is to come from the most parabolic tech stocks this earnings season?

Tech stocks have seen an unprecedented valuation push from the March lows. The trillion-dollar trio, aka Apple (AAPL - Free Report) , Amazon (AMZN - Free Report) , Microsoft (MSFT - Free Report) , has been pushed to valuation multiples that these growth powerhouses haven’t seen in other a decade.

The ripping tech rally the past 4 months has been mostly justified with the world compressing 5 years of digitalization in 5 months and the Federal Reserve extending the low-interest-rate environment. Still, the market euphoria has launched many of these tech stocks through price targets like a rocket through the atmosphere.

These price targets need to either be risen (again) or the market needs to correct. Earnings season is going to put valuations and investors tenacity to the test.

Will investors/traders pull profits once they see what they wanted, good or bad, or will this crazy rally continue?

This summertime quarterly results palooza is as good a time as any for investors to start readjusting their portfolios and roll some of their secular growth profits over to underperforming cyclical names.

Upcoming Earnings 

These next two weeks of earnings will be critical to the direction that the market takes next. Below is a chart providing all the key reports to keep an eye on.

IBM, (NVS - Free Report) , KO, (TXN - Free Report) , (LMT - Free Report) , (MSFT - Free Report) , TSLA, (AMZN - Free Report) , (INTC - Free Report) , (T - Free Report) , VZSAPNXPIVPFEAMGNMCDRTXSBUXFBPYPL, (SNY - Free Report) , SHOP, (BA - Free Report) , (QCOM - Free Report) , (AAPL - Free Report) , GOOGLPGMACMCSAMRKXOMABBV, (CVX - Free Report) , CAT

The Takeaway

Amid this next couple of weeks of crucial earnings, I advise you to be cautious with your investment/trading decisions. We are experiencing one of the most unprecedented markets in history, with Q2 earnings expected to undergo the worst decline in over a decade while stocks drive towards all-time highs.

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