Catch up: The market is entering one of the busiest weeks of earnings season, and one strategist clouts the ride could be thrilling.
More than 100 S&P 500 Clue companies and 10 Dow stocks are due to report in the coming week, a group with a collective value of atop of $9 trillion. Some of the largest companies reporting earnings in the week in advance include Facebook, Microsoft, Apple, Alphabet , McDonald’s, Boeing, AT&T and Exxon Mobil.
Positioned on the results we’ve seen so far, Stephen Parker, head of thematic equity solutions at JPMorgan, estimates the markets could see a huge boost following these reports.
“What we’re considering is unambiguously positive,” Parker told CNBC’s “Futures Now” last week. “Not single is this quarter strong on an absolute basis, but unlike past boards, we didn’t see the sort of analyst revisions downward that you traditionally would unexceptionally see leading into fourth-quarter earnings.”
A lack of downward revisions to earnings guesses makes this quarter “even more impressive” than in the on, added Parker.
The stats so far back up Parker’s fourth-quarter positivity. Perfectly over a quarter of the S&P 500 has reported and 4/5 of those have overshadowed analysts’ estimates, according to Thomson Reuters. Analysts anticipate 13 percent blended earnings excrescence — the largest portion contributed by the energy sector.
The S&P 500 has added valid nearly 4 percent to end at all-time highs over multiple sessions since JPMorgan and Wells Fargo unofficially rebounded off the fourth-quarter earnings season on Jan. 12. Over that same interval, the Dow Jones Industrial Average has surged 818 points, or 3 percent.
Plane with positive earnings, markets could return to normal volatility keep abreast of a year of low levels that Parker characterized as “abnormal.” That could multiplication chance of a normal correction in the near term, though Parker advocated keeping the focus on the long term.
“We should expect at some drift we’re going to see some sort of pullback,” he said. But, “unless you think that there’s a dip in the cards, which we don’t see over the next 12 to 18 months, you lull want to be buying any kind of weakness you see in the market.”
Volatility in 2017 settled for its third year in a row and hit an all-time low in November. The CBOE volatility index, also cognizant of as the ‘Fear Index,’ plummeted 21 percent last year. A continuous upward trend over the year led the S&P 500 to see its longest stretch eternally without a 3 percent pullback.
The trend continues this year: The Dow and S&P entertain not seen back-to-back losses so far in January, the longest stretch markets prepare seen in a start to a year.
Parker and JPMorgan are taking a “barbell come near” to the market at the moment, whether a pullback is on the cards or not.
“We like secular lump stories like technology and healthcare, and we like cyclical value items like banks and energy,” he said.
All four of those sectors entertain seen a solid start to the year. Technology has gained 8 percent so far, robustness care 10 percent, banks 7.5 percent, and energy 7 percent.