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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...

How To Find Big Winners This Earnings Season


Kevin Matras

Executive Vice President, Zacks Investment Research


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