The second-quarter earnings derby is off in full speed, which means politics, the CrowdStrike mishap and interest rates have taken a backseat in investors’ minds –at least for a while.
The Dow Jones Industrial Average and the S&P 500 opened little changed, while the Nasdaq Composite declined 0.2%.
General Motors announced better-than-expected quarterly earnings and raised its financial outlook; investors look pleased as the stock moves up. Coca-Cola also exceeded revenue expectations, despite all the talk about slowing consumer spending. Tesla and Google-parent Alphabet are set to report after the market closes.
IBM reports earnings tomorrow. Any negative commentary about a slow adoption of artificial intelligence and higher capital spending from technology companies could spell trouble for their shares. The bar is especially high as valuations still look elevated, despite last week’s tech selloff.
There will eventually be winners and losers at the end of the reporting period in August, as with any quarter. “But, it is the overall market trend that matters. And earnings are expected to grow nicely in Q2, for the entire year and into 2025,” said Nancy Tengler, CEO & CIO of Laffer Tengler Investments.
Estimates show 9.6% earnings growth in the second quarter and for the full year, 10.4%.