(July 10 – 9:30 ET) – Second quarter earnings season starts in earnest this week.
Analysts at First Call Thomson Financial Inc. say, “This week marks the start of what should be a very strong 2Q00 reporting season.”
Markets remained in check through the traditional pre-earnings warning period, now as companies begin announcing actual results traders are expecting a little more action.
“Unfortunately, the market has again over reacted to the negative pre-announcements,” says First Call. “It seems the investment community always forgets that there is always a negative bias to the pre-announcements and that the real question is not whether the pre-announcements are coming in on the negative side, but are they coming in more or less negative than usual.”
Four Dow stocks report this week: Monday brings Alcoa,International Paper reports on Tuesday, with J.P. Morgan and General Electric probably on Thursday. Yahoo! reports on Tuesday. Maytag is slated for Thursday, and First Call suggests it should be of particular interest as an indicator of whether the Fed rate hikes are starting to slow consumer spending.
It addition to the big names reporting on Thursday Canada’s own PMC-Sierra should report, along with several Internet firms, such as Redback Networks, Webvan, Stamps.com, and tech plays, Gateway, Vitesse Semiconductor, and Altera.
“There likely is enough momentum to carry earnings to good growth in 3Q00 of about 19% to 20%. The real question is 4Q00,” First Call concludes, “Earnings growth in 4Q00 will surely be less, but the question is how steep is the earnings growth slowdown as we exit the year.”
-IE Staff