We’ve hit the midway point of earnings season.  Last week saw a sharp reversal of better-than-expected financial results, especially for earnings per share. According to FactSet, 44% of S&P 500 companies have released results:

• 61% beat on revenue
• 77% beat on earnings

I think aggregate earnings have now declined to -2.6%, which is in line with expectations coming into the announcing period. A deeper look shows companies doing more than half of their business in the United States are doing extremely better than those doing more than half of their business outside the United States.

Some of that is because of the strong dollar, and some of that is because the global economy is struggling. It’s attributed to the trade fight between the United States and China - the bottom line is no economy can match the United States.  That’s why there’s been a race to the bottom by central banks around the globe, and it’s just one reason why the Federal Reserve will join the party this week.

Earnings Calendar

This will be the busiest week of the earnings season.  The big focus will be on Apple (AAPL), but we will be able to glean so much on the economy and other issues from the following names:

• Altria Group (MO)
• Procter & Gamble (PG)
• Mastercard (MA)
• Hess Corp. (HES)
• Yum! Brands (YUM)
• Clorox (CLX)
• Exxon Mobil (XOM)
• Chevron (CVX)
• Pfizer (PFE)
• Gilead Sciences (GILD)

Then there are earnings releases from hot stocks, including Square (SQ) and Wayfair (W).  And of course, is there any way that financial results from Beyond Meat (BYND) could justify the recent rally? 

Portfolio Approach

We took profits on two positions last week, and we added two new ones.  We are almost fully invested.  If you are not a current subscriber to our Hotline, click here to get started today.

The futures are relatively flat this morning as we await earnings, the Fed’s decision on rates, and the all-important July employment report, which will be released on Friday.   Tomorrow, the Fed will begin its two-day meeting.  The current conventional wisdom is that we will get at minimum 25 basis point cut.  Also, tomorrow, the U.S. and China will begin another round to trade talks in Beijing.