Earnings Season began in earnest last week, highlighted by major banks/financials. Companies including JPMorgan Chase, Citigroup, Wells Fargo, Bank of America, and Goldman Sachs beat their earnings expectations, but after the group as a whole had a large runup so far this year, the general stock reaction was relatively stable. For some specific highlights and movers from last week: Netflix shareholders did not like watching their stock drop over 5%, despite the success of Squid Game and the company beating on both the top and bottom lines; PepsiCo investors, on the other hand, liked the sweet taste of a nearly 7% pop in their stock after a nice profit beat; American Express shares got debited a couple percent despite their earnings beat, with forward guidance in line with expectations.
Taking a look at how the major stock market averages performed last week – the Dow Jones Industrial Average edged just .1% lower to 44,342 – the Standard & Poor’s 500 Indexadded .6% to 6,297 – while the NASDAQ Composite gained 1.5% to 20,896, closing the week at another record high. We are entering the heart of earnings season with the major indices either at or very close to their all-time highs.
Looking to the week ahead, earnings activity really ramps up, with approximately one-fifth of Standard & Poor’s 500 companies scheduled to announce quarterly results. Companies reporting this week include Verizon Communications, Coca-Cola, AT&T, International Business Machines, Honeywell, Texas Instruments, Intuitive Surgical, Lockheed Martin, General Dynamics, Intel, ServiceNow, General Motors, Chipotle Mexican Grill, American Airlines. The most anticipated reports will be from the first two Magnificent Seven stocks to report, Tesla and Alphabet, as this pair of companies introduces big tech earnings.
Taking an early peek at the earnings scoreboard – for the second quarter of 2025, with 12% of S&P 500 companies reporting actual results, 83% of S&P 500 companies have reported a positive EPS (Earnings Per Share) surprise, which is above the 5-year average of 78% and above the 10-year average of 75% – according to FactSet. Overall, earnings season is off to a strong start.
In addition to being focused on earnings reports this week, financial markets will continue to have an eye on tariffs, trade policy, Federal Reserve policy and the likelihood of interest rate cuts coming this year, to name just a few items.
As always, don’t hesitate to contact us if you have any questions or would like to set up a meeting.
All the best – Southport Station Financial Management, LLC