Thursday's Market Minute: The Bigger Picture In Quarterly Reports

Earnings season is back. While companies release their fourth quarter financial results, investors and market watchers get the inside scoop into not only what’s going on behind closed doors at one company, but also into the overall economy. Certain sectors are impacted more by different economic conditions. Retail is often tied with consumer confidence and labor: how many iPads a family gets for Christmas, for instance, shows confidence in a steady future income, which likely shows a higher employment rate.

Other sectors, like semiconductor stocks and airlines, can provide insight into many different facets of the economy. Semiconductors are used in just about everything nowadays from the obvious, like one’s computer and cell phone, to an electric vehicle (the more semis are used in products, the more products being consumed, the more confident the consumer). Semis, too, are often heavily linked to the Chinese economy, and are susceptible to tariffs.

Airlines – this morning Southwest Airlines (NYSE:LUV), American Airlines Group Inc (NASDAQ:AAL), and JetBlue Airways Corporation (NASDAQ:JBLU) reported earnings – are also impacted by a variety of economic conditions, including consumer confidence, energy prices, and U.S. manufacturing data. Granted, three months is a short time period for which to judge, but within these shorter-term reports is often a lot of telling information. After all, one negative quarter doesn’t happen independently from the others.

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