Earnings helped lift the overall stock market last week. If the U.S. economy is not entering a recession, buying when the market is down ten percent is an opportunity based on history. Currently, a recession does not look likely. Actual results from the current earnings season should support stocks.
Amid significant market volatility, the fourth-quarter earnings season continued last week and provided a broader look at the earnings across the sectors. This week will be the busiest of the earnings season, with 109 S&P 500 companies scheduled to report earnings.33% of S&P 500 companies have reported results so far, with 77% and 75% exceeding consensus earnings and sales estimates, respectively. As expected, forward guidance has remained essential with the current worries about the economic outlook and cost pressures. The impact of supply chain disruptions and any color about the timing of normalization are significant for forecasts. Earnings from Netflix (NFLX) cast a pall over technology and the growth segment of the market after its disappointing subscriber numbers the previous week. The negative sentiment continued to start last week, but solid earnings and outlooks from Microsoft (MSFT) and Apple (AAPL) helped break the gloom by the end of the week.
