Earnings, billed as the market’s savoir in the weeks before reporting season, have become an after-thought. Companies are as usual far surpassing analyst estimates -- after guiding the same estimates down at the fastest pace since data beginning in 2010. And measuring the impact of corporate announcements gets a little moot in a market that has risen or fallen by 1 percent in five of the last seven sessions.
Investors are having trouble discerning signals. Netflix Inc. reported blowout quarterly growth on Monday and rallied in after hours, buoying hopes the broader FANG cohort would follow suit and prompting investors to put $1.9 billion into the Invesco QQQ ETF on Wednesday. The security is down 2.4 percent today.
“Our regime-detection model suggests positive returns with bouts of volatility remain likely in this late stage of the cycle, consistent with a market that behaves more like a sheep than a bull,” said Gina Martin Adams, chief equity strategist at Bloomberg Intelligence. “Tightening monetary policy and trade-policy uncertainty may continue to weigh on risk tolerance.”
This article was provided by Bloomberg News.