We hope you all enjoyed the long holiday weekend! As we get back into the swing of things this week, we find ourselves in the heart of earnings season. Over 100 S&P 500 companies are scheduled to announce quarterly results during the week ahead, including 3M, Intel, GE Aerospace, Boeing, Verizon, General Dynamics, International Business Machines, Merck, PepsiCo, Procter & Gamble, Southwest Airlines, Union Pacific, and Schlumberger. Undoubtedly, the most high-profile earnings reports out this week will be from two of the Magnificent 7 – Tesla and Alphabet.
Tesla has been in the spotlight (more than usual) of late due to Elon Musk’s involvement with President Trump and his administration. The company has seen a notable drop in sales. Alphabet’s results will be analyzed for a gauge of advertising spending and the expenses/outlook related to Artificial Intelligence.
Overall, estimates for earnings growth have been scaled back of late. According to FactSet: For the first quarter of 2025, the blended year-over-year earnings growth rate for the S&P 500 is 7.2%. If 7.2% is the actual growth rate for the quarter, it will mark the seventh-straight quarter of year-over-year earnings growth reported by the index.
Earnings Season is heating up at a time while the market is in a bad mood and a downtrend. All three major stock market indices posted declines last week. The Standard & Poor’s 500 Index declined 1.5% to 5,283. The Dow Jones Industrial Average and the NASDAQ Composite each shed approximately 2.6% to 39,142 and 16,286, respectively. The stock market has now declined 3 out of the last 4 weeks, driven lower primarily by the tariff and trade war situation playing out around the globe.
While profits are the mother’s milk of stock prices (especially over the long term), this earnings season will likely be overshadowed by the developments surrounding tariffs and the trade war(s). Remember, we believe in time in the market as opposed to timing the market. The tariff tumult will NOT last forever – invest for the long term!
As always, do not hesitate to contact us if you have any questions or to schedule a meeting.
All the best – Southport Station Financial Management, LLC