Thursday's Market Minute: Earnings Are Strong As Ever

The Dow Jones Industrial Average ($DJI) closed Wednesday at fresh record highs as investors remain optimistic about another stimulus check from the Biden administration. Since February 1, the Dow has gained nearly five percent. While the rest of the major stock indices, the SPX, NDX & RUT, reached new records within the intraday, they all closed lower, putting an end to their recent winning streaks. Volatility is also easing. The VIX has been holding around a 22-level since Feb. 4, and if we continue to see small day-to-day movement in the major indices, we can expect that to put pressure on the Volatility Index.

As of February 5, more than half of the companies in the S&P 500 have delivered 4Q results. Of these companies, Factset figures that 81 percent have reported EPS above estimates, and 79 percent have reported higher revenues. Were both of those percentages to hold until the end of the quarter, they would tie the mark for the highest percentage of SPX companies reporting a positive earnings surprise since Factset began tracking the data in 2008. That’s good news for the overall economy, as it means those companies that were able to deliver growth through the pandemic have virtually made up for those most affected. There are still plenty more companies left to report, however. This afternoon, we’ll see 1Q results out of Walt Disney Co DIS. The street is expecting The Mouse to post a $0.45 loss on $14.84B in total revenues, which would be down 24 percent year-over-year.

Photo by Sophie Backes on Unsplash