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The Odds Are High For Another Positive Earnings Season
The markets all finished in the green yesterday and made new all-time highs again in the process.
And with earnings season upon us, I expect more new highs to come.
Even though we've gotten a fair amount of earnings reports already, earnings season 'officially' just got started yesterday when Alcoa reported earnings after the close.
And while they missed on earnings, they did beat on sales. But Alcoa, once a bellwether company in the past, only marks the start of earnings season now out of sheer tradition as it was once the first Dow component to report earnings. But that tradition has stuck, even though they aren't a part of the Dow anymore.
So why am I so excited for earnings season?
Because over the last 8.5 years since this bull market began (34 earnings seasons), the median return for the S&P during earnings season is 2.27%, with a full 73% of those earnings seasons being up.
And from where we are today, a 2.27% increase would put the S&P at over 2,612. That, by the way, would fulfill my minimum price target in the S&P of 2,600. But I don't think we'll stop there.
Why? Because statistics also show that the median return for the S&P in the 30 days following earning season was an additional 1.82%, with 60% of the post-earnings season periods being up if the earnings season was up. That would then put the S&P at 2,661.
While an extra 2-4% in the S&P is fantastic. It's not uncommon for a positive earnings announcement to send a stock up 10%, 15% or even 20% or more in a single day. And with the odds of another positive earnings season in our favor, I'm especially looking forward to this one.
And you should too.
In fact, if you want to learn how to find potentially big winners this earnings season BEFORE they report, I encourage you to read our latest commentary aptly called...
With individual stock selection now more critical than ever, this report is designed to bring you some of our top ideas for the year ahead. One of the companies highlighted in this report controls the smartphone market and now has its sights set on owning a bigger technology.
It has the potential to be the most valuable stock in the history of investing. You need to find out the name of this company before the rest of the market does.
ROE helps investors distinguish profit-generating companies from profit burners and is useful in determining the financial health of a company. Read More »
The current administration's tax reform and deregulation proposals and sustained strong earnings performance are the factors powering this ascent. Read More »
Zacks' research breakthrough now predicts with 82.49% precision which stocks will beat earnings expectations before their reports are released. This can lead to double-digit gains in as little as 2 days.
Which stocks is it picking now? You can find out until Sunday, October 22.