January 28, 2020
Yesterday we talked about the prospects of the "coronavirus narrative" giving way to the power Q4 earnings.
That was the case today.
Remember, we're in the heart of fourth quarter earnings, with 35% of the S&P 500 reporting this week. And the tech giants are leading the way. We heard from Apple and Ebay after the bell today (both beat). We hear from Microsoft, Amazon and Facebook tomorrow.
Overall, the table has been set for earnings beats. As I've said, never underestimate the appetite of Corporate America to lower the expectations bar when given the opportunity. They did so in their third quarter calls, taking advantage of the global uncertainty surrounding trade.
And now we're getting about seven out of every ten companies beating Q4 estimates. And with a trade deal now papered, the outlook expressed in these Q4 earnings calls is as good as we've seen from corporate America since early 2018 calls, which followed the big corporate tax cut.
With the focus turning toward earnings, we looked at this big trendline support yesterday in stocks.
As you can see, we did indeed get a nice bounce from this line.
And with that, we had a fall back in the VIX from what is relatively subdued levels, for what has been scrutinized as a pandemic threat.