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Stocks Euphoric into Earnings Season

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Stocks closed at all-time highs yesterday, continuing the euphoric atmosphere seen since the beginning of 2021. With President Biden now sworn in, market participants will start to look away from Washington and focus on corporate earnings.

We have already seen a few numbers from the financials, but Netflix was the star yesterday, with a 17% move higher after a stellar earnings report. More big tech earnings are on the way over the next few weeks and expectorations are high.

The exact details of the stimulus plan will likely become known over the next few weeks as the Biden Administration settles in. Investors should monitor headlines on direct payments, unemployment benefits, minimum wage and local government aid. Markets seem to be responsive to the numerical amounts of these parts on the $1.9 Trillion American Rescue Plan.

S&P Futures Trading Levels

The S&P futures currently sits at 3850, about 10 handles off the overnight highs.   

Support levels for the day will be 3827 and 3801.

Upside resistance is 3865 and 3891.

The current S&P trading environment is breaking out higher. The January effect, with the combination of a low-risk environment, is causing a melt up situation. Trading today could see and expanded range and be volatile due to the magnitude of yesterdays move.

Three Stocks to Watch

NFLX- Earnings Tuesday night gave FANG a big lift yesterday and Netflix looks great for further extension higher. NFLX subscribers topped guidance, they guided above EPS consensus and the company will explore share repurchases. Perhaps the biggest win is the promise to not tap debt markets, saying they will be cash flow positive. This really is a game changer for the stock.  

UAL- United Airlines posted another loss in Q4, but this wasn’t a surprise. The company’s futures earnings will be reliant on the virus getting under control, but UAL does expect to exceed pre-pandemic margins by 2023. The stock is trading lower by 2% in the pre-market.

GBTC/Bitcoin– The hottest trade over the last few months is cooling off a bit as bitcoin futures are off over 7% this morning. The best way to enter this trade through a brokerage account is GBTC, which is now over 30% from all-time highs.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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United Airlines Holdings Inc (UAL) - free report >>

Netflix, Inc. (NFLX) - free report >>

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