Earnings report season approaches

Author: Forex Live | Category: Education

What to watch out for in earnings season

IGM
Whether a traditional stock trader, or just an individual who ventures into the stock market during specific periods, the earning report seasons are extremely important as it is known to have a significant impact on the price of assets. Earnings Season happens four times a year and is when US based companies announce their financial figures such as revenue, earnings per share and ses figures. As Earnings Season is approaching, as part of the article we will look at some of IGM's most popular US based stocks.

Amazon Stocks

Based on the market open and close prices, the asset has formed six consecutive sessions, increasing in value from $3,040 to $3,410 since the start of the month. The positive price movement further indicates trader's intentions and the overall stock market sentiment when looking at related indices such as the NASDAQ. The NASDAQ is an asset we will evaluate later in the article.

The last fiscal quarter recorded revenue of $125.56 billion, which exceeded the previous quarter's result by 34%. Earnings per share also hit a record at $14.09. Apart from financial performance, the company has become a leader in job creation, adding 500K global positions, more than 400,000 of which are in the USA. An important contribution to the stabilization of the labor market was noted even by President Joe Biden.

Recently, the head of the corporation Jeff Bezos supported the plan of the head of the White House to raise the corporate tax rate, and noted the desire of the president to improve the country's infrastructure. Thus, Bezos did not criticize the government, as other heads of TOP-5 companies do, but on the contrary, demonstrated loyalty to the authorities, which could bring benefits to the company in the future according to certain analysts.

There are positives and negatives when looking at the NASDAQ's prediction for 2021's quarterly release. The predictions for the next release is an earnings per share of $9.89, which is $2.84 higher than the previous prediction, but $4.20 lower than the latest actual release. Traders will be monitoring whether the actual release on the 29th April will be higher than the predicted figure. Higher figures can positively affect the price movement, whereas lower figures can strain the asset's price movement.

Apple Stocks

Apple Shares ended yesterday's trading session at a new monthly-high, reflecting a 9.2% uptrend since the beginning of this month. From the March 4th-month minimum, the growth of the issuer exceeded 15.5%. Over the past week, it grew by 6.51%, while the S&P500 added 1.66%, though it should be noted volatility for indices are known to be at a lower percentage. The company is due to release its next quarterly figures on the 28th April 2021. The company is predicted to release an earnings per share figure of only $0.99, which is lower than the previous quarters prediction and actual release. Though it should be noted that the figures are predicted to improve towards the end of the year.

The company has announced a special event on 20th April to unveil the new iPad Pro and other products. According to Bloomberg News, the corporation is working on new smart home innovations, including a new device that combines an Apple TV set-top box, a HomePod speaker, and a video conferencing camera. Earlier, Morgan Stanley analysts affirmed the rating of Apple, "outperforming" by lowering the target price from $164 to $156 per share. UBS analysts have set a buy recommendation with a target price of $142 per share.

NASDAQ

The Nasdaq is the index which is more directly related to both Apple and Amazon as the assets are known to be related mainly to technology based companies. Traders when analysing stocks and earnings per share not only analyse the price movement of the stock itself, but also the movement and condition of the overall stock market; this is something which can be done to a certain extent by evaluating the NASDAQ as the index takes into account 100 of the main technology based stocks. The asset continues to rise, trading at 14,000. It seems that no economic events are capable of exerting significant pressure on US stock indices, which continue to grow actively, setting new records after a crash in February 2021.

The main wave of corporate reporting officially kicks off today, starting with the banking sector. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Wells Fargo & Company will publish their reports. The banking sector has been the market leader for the past two months, so investors and analysts are expecting optimistic results.

However, there was worrying news for Johnson & Johnson Co. yesterday; the US Food and Drug Administration (FDA) has recommended that the company's coronavirus vaccine be suspended because six patients vaccinated with the drug were diagnosed with thrombosis. Johnson & Johnson Co. have already reacted to this news with a decline of more than 2%.

The growth leaders in the index are: Tesla Inc. (+8.60%), Moderna Inc. (+7.40%), Zoom Video Inc. (+6.61%), Okta Inc. (+6.57%). Among the leaders of the decline are: Micron Technology Inc. (-3.60%), NXP Semiconductors NV (-2.86%), Marvell Technology Group Ltd. (-1.81%).

This article was written and submitted by IGM FX.

*Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

*Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing investing advice or a recommendation, or an offer of or solicitation for any transactions in financial instruments or a guarantee or a prediction of future performance. Past performance is not a guarantee of or prediction of future performance.
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