Why The Next 4 Weeks Could Be Lethal For The Stock Market

Just take a gander at what investors will be up against as they are hit over the head with volumes of earnings reports starting with banks and industrials this week. First, the likelihood that some quite large companies won’t have any earnings to speak of — rather steep losses as the coronavirus blows through their financial statements.

Second, the sweeteners to stock ownership — dividends and stock buybacks — will be curtailed significantly with companies headed into cash preservation and restructuring mode. Not ugly enough? Well, then you will have CFOs unlikely to put forward any form of financial guidance — that’s if they haven’t yanked outlooks already at the end of quarter pre-announcements.

Good luck modeling future earnings, people. Meanwhile, earnings call where executives often attempt to spin a positive narrative no matter the environment will mostly be devoid of that hope that usually could rally a stock despite a bad quarter. Unless you are an investor in companies packaging Spam or Twinkies, this earnings season will be taxing on the mind and potentially lethal to the trading account. “It will take a strong and sustainable improvement in earnings to enable the stock market to rally a lot more than it already has,” Miller Tabak chief markets strategist Matt Maley says. -Full Report