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Stocks Pull Back, Remain In Record Territory

Stocks pulled back yesterday with the major indexes off about a half percent. But markets remain in recently minted record territory.

I wouldn't read too much into yesterday. In fact, I wouldn't read anything into yesterday, other than stocks don't go straight up every day.

The economy is doing great. And the market looks as good as ever.

Earnings season 'officially' kicked off yesterday with Alcoa reporting a positive earnings surprise after the close. Nothing spectacular, but they did show a smaller loss than expected on sales that met expectations.

But traders will likely be paying more attention to Netflix, which reported after the close as well, posting a positive earnings surprise, but missing a bit on sales. However, it was the big miss on subscriber growth (2.7 million vs. 5.06 million expected), that disappointed investors. Shares were down approximately -12% in after-hours trade.

That could weigh on stocks today, but I wouldn't assign any further meaning to NFLX's subscriber miss and what that means for the broader earnings season.

Quite frankly, their financials were pretty good. Only real problem I see is competition in a space they have dominated for so long, which helped them amass a subscriber base of 151.6 million streamers worldwide. That's a problem that is uniquely theirs, and is not reflective of the broader economy.

We'll get another 109 companies reporting earnings today. And another 51 reporting tomorrow.

Things pick up big time next week with another 916 on deck.

Earnings season is always an exciting time for the market. And it's not uncommon to see individual stocks soar (or sink) 10%, 15%, or even 20% or more in one day after a report.

The key is getting into the right stocks.

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...

How to Find Big Winners This Earnings Season


Kevin Matras

Executive Vice President, Zacks Investment Research


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