Friday Charts: Your Post-Tax Day Gift — And The Ugliest Earnings Streak In Tech

Friday Charts: Your Post-Tax Day Gift — and the Ugliest Earnings Streak in Tech

It’s Friday in the Wall Street Daily Nation. If you’re a newbie, that means I’m skipping the long-winded analysis. Instead, I’ll let some carefully selected graphics speak for me.

We’re on the cusp of an earnings onslaught. Peak reporting season hits on April 27, when 72 S&P 500 companies report results. So I figured there’s no better place to focus our attention.

After all, nothing possesses more power to consistently move stock prices dramatically higher (or lower) than an earnings report. We’re going to start with the ugliest, most depressing earnings trend in existence. Yes, it’s a caveat emptor situation. Then it’s time to pivot to an opportunity hiding in a shiny, contrarian wrapper. Let’s get to it.

In Desperate Need of Reinvention

Oh, how far this tech giant has fallen. Founded in 1911, International Business Machines (IBM) has long been synonymous with tech dominance. Nowadays? Not so much. Case in point: The company just posted its 20th consecutive quarter of declining revenue.

S&P 1500 analyst revision spread by sector

That’s no streak to celebrate. And that’s why investors are high-tailing it for the exits. Shares fell 5% in the immediate aftermath of the report.

Until this trend reverses, steer clear. Thankfully, all stocks aren’t as dangerous as IBM this earnings season. Let me explain…

It Pays to Be a Contrarian

In February, I shared three charts to prove once again it pays to be contrarian.

Heading into earnings seasons, I’m convinced that we’re staring at the next situation set to become a case study in gold to prove this axiom.

You see, analysts and institutional investors are universally negative.

As The Wall Street Journal’s Chris Dieterich notes, “Stock market bulls have all but disappeared over the past six weeks as optimism wanes for swift enactment of economy-boosting tax cuts and infrastructure spending.”

1 2
View single page >> |

Disclosure: None.

Disclaimer: Wall Street Daily is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Agora Financial delivering daily email issues and advertisements. To end your Wall Street Daily e-mail subscription and associated external offers sent from Wall Street Daily, feel free to click here.

Please read our Privacy Statement. For any further comments or concerns please click here. If you are you having trouble receiving your Wall Street Daily subscription, you can ensure its arrival in your mailbox by whitelisting the Wall Street Daily e-letter.

© 2016 Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice.

We expressly forbid our writers from having a financial interest in any security they personally recommend to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.


Leave a comment to automatically be entered into our contest to win a free iPad Pro.