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

Best,

Kevin Matras

Executive Vice President, Zacks Investment Research

Sponsor

Want a piece of the wealthy's favorite asset class?

DiversyFund opens up the private real estate market to all investors for as little as $500. Adding alternatives to your portfolio gives you diversification, protection in downturns, a hedge against inflation, and the potential for high returns! Plus, you pay no platform,
middlemen, or servicing fees.

Invest, view property updates, and track your dividends all online.

90% of the world's millionaires have had real estate play a role in building their wealth. Are you ready to join them?

Start building long-term wealth through real estate today >>

7 S&P 500-Beating Stocks to Buy Ahead of Q2 Earnings

The index's earnings growth is expected to decelerate this time around due to tariffs that continue to squeeze profit margins of enterprises with significant exposure to China. Read More »

5 Top Stocks to Buy as Retail Sales Defy Expectations

Strong consumer spending is now likely to extend the current economic expansion even further. Read More »

3 Stocks to Make the Most of Business Services Industry Rally

The industry, which is placed in the top 26% of more than the 250 Zacks industries, has rallied 44.1% to date. Read More »

5 Leveraged ETFs That Gained Double-Digits Halfway July

Leveraged funds provide multiple exposure (i.e. 2x or 3x) to the daily performance of the underlying index. Read More »

Should You Buy a Cannabis ETF?

There are now 3 pot ETFs with several more to launch soon. Is this a good way for investors to get exposure to the cannabis industry? Read More »

Sponsor

Next Week's Earnings Surprises

Bull of the Day: Boot Barn (BOOT)

With double digit same-store-sales, this western retailer is operating on all cylinders. Read More »

New Zacks Strong Buys for July 18th

Here are 5 stocks added to the Zacks Rank #1 (Strong Buy) List today. Read More »