Invast Blog

US Earnings Checklist

US earnings reports will take centre stage this week. We have summarised some of the key earnings releases daily for the entire week with our comments attached. Use this as a checklist for trading opportunities.

Monday 17.10.16

Bank of America – Looking to see if the earnings growth can continue and if there are any signs or reads into the broader US economy. If the Fed raises in December, what will the impact be here? The market needs to see a strong result.

Netflix – Subscriber growth disappointed in the last quarter and Netflix has really struggled to find its way since. If the growth path improves, we could start to see the stock resume back over US$100 and if not, we’ll probably see it search for a new yearly low.

Tuesday 18.10.16

J&J – The market will be looking again for a read into consumer behaviour and comparable growth rates across each region. There might also be some guidance into Europe and Asia and how that is impacting the business. Not expecting too much volatility here, more on the commentary and guidance.

Intel – Focus for the business is on higher growth areas like data centres and the internet of things, so the numbers need to start stacking up. We could see more on product innovation and the long term strategy to move away from being heavily reliant on the PC market.

Wednesday 19.10.16

Morgan Stanley – The financials have been primed for good news so anything short or a miss will see a pullback for Morgan Stanley shares. Looking to see how it will respond to industry pressures, not so much Wells Fargo but the broader sales and remuneration of staff.

American Express – Has been pretty disappointing over the year, so this is very much a make or break result release. American Express needs to prove its relevance to the market – a lot of negativity going in, not much upside expected. Down 20% over the past year.

Thursday 20.10.16

Microsoft – After its bold move to acquire LinkedIn, Microsoft now needs to justify the strategy and numbers. Also commentary on potential acquisitions – Twitter? Questions will be asked. The numbers are likely to remain fairly solid, without much surprise. It’s been a good year, finally.

Amazon – One of the best performing stocks on the market so a huge amount of expectations going into the result. The stock is up 50% over the past year and it needs to guide to its future data business, its position in media and subscription space and of course, its underlying retail expansion strategy. An absolute giant.

Friday 21.10.16

GE – Like J&J the market will be looking for the composition and the growth breakdown across each distinct product and geography. It’s been a flat year – delivering returns similar to Apple but without the same sting in balance sheet and competitors falling to their knees. GE trades on a high PE due to its earnings predictability and sustainability, so it needs to be rock solid to maintain that. Looking a little expensive to us.

McDonalds – Earnings growth and comparable sales growth have been disappointed over the past few years with many headwinds. Now management needs to stand up and convince the market that the franchise is in control and has the ability to adapt. The numbers need to show it too. The stock has recently picked up after lagging earlier in the year, so the market is expecting good news.

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Happy investing,

Peter Esho

Chief Market Analyst

Peter Esho is a member of Invast’s Investment Committee and Chief Market Analyst at Invast Financial Services in Australia.   The Invast’s Investment Committee constructs professionally constructed global thematic portfolios of Direct Market Access (DMA) CFDs over highly liquid global shares and ETFs through its new PortfolioInvestor platform. Since 1960, the Invast Group has grown to become one of the largest and most successful global brokerage firms, offering state-of-the-art trading technology and unparalleled service catering to all levels of traders.

Invast Financial Services Pty Ltd (ABN 48 162 400 035) is regulated by the Australian Securities and Investments Commission and holds an AFS Licence 438283 which authorises it to carry on a financial services business in Australia.

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