Tahoe-Truckee Market Beat: A look at fourth-quarter earnings | SierraSun.com

Tahoe-Truckee Market Beat: A look at fourth-quarter earnings

Earnings season is just getting underway and it looks like the stock market could use some good news.

As I write this, the S&P 500 is down just over 2 percent year to date. Aluminum maker Alcoa traditionally kicks off the quarterly earnings season, and it reported better than expected earnings and revenue last Monday after the market closed to get the earnings season going.

Earnings reporting will begin in earnest over the next few weeks and should be the main driver of stock prices in the near term.

The S&P 500 is expected to have earnings growth of about 3.5 percent this quarter and that number has been revised downward recently.

That means the bar is set pretty low and some upside earnings surprises could be good news for the market.

Health care and telecom are forecast to be the strongest sectors, with growth rates above 10 percent.

The industrial sector is also forecast to have a growth rate over 10 percent. Energy and materials are expected to be among the worst performing sectors.

The financial sector is forecast to show an earnings decline of 0.6 percent, and so far, three of the major banks have reported and they have all missed their estimates.

Bank of America, Citigroup and J.P. Morgan Chase have all reported and all three had earnings and trading revenue that were below expectations.

Chip maker Intel has already reported better than expected income and revenue. Intel was one of the best performing stocks in the Dow Jones Industrial Average last year with a gain of over 40 percent.

The energy sector will be the one to watch this quarter, as the low price of crude oil should have an adverse impact of the profits of energy companies.

The low cost of oil and gas should benefit other sectors, but it may take some time for that effect to show up.

It will be interesting to see how the rest of the earnings reports come in. With overall expectations set pretty low we can hope for some upside surprises.

Kenneth Roberts is a Truckee-based Registered Investment Advisor. Information is at his blog at http://www.sellacalloption.com or 775-657-8065. The mention of securities should not be considered an offer to sell or solicitation to buy investments mentioned. Consult your investment professional to understand the risks and/or how the purchase or sale of these investments may be implemented to meet your investment goals. Past performance is no guarantee of future results.

Support Local Journalism


Support Local Journalism

Readers around Lake Tahoe, Truckee, and beyond make the Sierra Sun's work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.

Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.

Your donation will help us continue to cover COVID-19 and our other vital local news.

For tax deductible donations, click here.

Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User


Pine Nuts: Young leaders of the Americas


Zoom meetings are like Near Beer, you don’t get a buzz, but you still get the weight gain. However, when Kevin Sung called from the Young Leaders of the Americas Initiative at the Northern Nevada…

See more