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Earnings Data Deluge

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We’re right near the end of calendar Q2 earnings season, and companies are reporting this Friday morning in a veritable deluge of earnings beats. Of course, analysts had been expecting earnings results to far exceed what we had seen from these same companies a year ago, but we are now seeing routine beats of 20% or more. This is no ordinary earnings season, even forgetting the low base effect.

Deere & Co. ((DE - Free Report) , which carried a Zacks Rank #2 (Buy) recommendation into its earnings release, posted earnings of $5.32 per share, an 18.5% beat over the expected $4.49 (and more than double the year-ago $2.57 per share). Revenues of $10.41 billion in the quarter topped expectations by 2.1%. Guidance for the full year was also raised. Shares are up +1.4% on the news, and +33.4 year to date — nearly doubling the S&P 500.

Foot Locker ((FL - Free Report) put up a beat of +104.6% from the Zacks consensus, posting $2.21 per share compared to the $1.08 expected (and the 71 cents a year ago). Revenues of $2.28 billion in the quarter outpaced expectations by +7.77%. This performance impressed investors in early trading: the stock is up 9% a half hour before the opening bell. The company has gained 39% year to date.

Apparel accessories company The Buckle ((BKE - Free Report) kept this morning’s streak going, with $1.04 per share easily outperforming the 86 cents our analysts were expecting. Sales for the quarter came in flat at $295.12 million (+0.01%), though it’s a big jump year-over-year from the $216 million brought in for Q2 2020. Shares are up 4.3% on the news. The stock had a Zacks Rank #2 ahead of the earnings report.

As earnings season winds down — and we should always read Director of Research Sheraz Mian’s take on earnings tallies, such as here: Strong Retail Sector Earnings — we will need to look elsewhere for catalysts to market growth. Of course, we’ve seen that even a boffo earnings season like the one just concluding is no match for fears of a new wave of coronavirus, so whatever takes the narrative will need to be strongly definitive to climb our wall of worry.

Next week, we get a bevy of economic reports hitting the tape: PMI Manufacturing and Services, New Home Sales, Durable Goods, Personal Income & Consumer Spending, Trade in Goods, the University of Michigan Survey and, of course, Initial and Continuing Jobless Claims. The following week brings us new monthly jobs data, which may be that next catalyst investors are looking for.

We are seeing a bit of a rally in this final trading session for the week: the Dow is +48, the S&P 500 +8 and the Nasdaq is +55 points at this hour. Still, it would take a sustained rally throughout the course of the day to make up for the losses the indexes have racked up through this week. And with Friday summer trading hours before us, this may be a bit much to expect. (Then again, the Dow was trading -150 points a couple hours ago — so who knows?)

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Deere & Company (DE) - free report >>

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Buckle, Inc. The (BKE) - free report >>