Earnings season has arrived amidst a slowdown in global growth and beaten down stock market.
Corporate earnings are expected to be on the weaker side for the season. But a lot of it is priced in and investors are left with mixed opinions on the market.
If results are poor, the market will take a beating and retest its lows. If earnings are good, they may boost the market further upwards, say, strategists.
Analysts say that expectations for the year 2019 have come down sharply. This has brought stock prices down and negativity is factored into the market. Keith Parker, the equity strategist from UBS says that volatility will continue. However, there may be mixed results, wherein relief rallies may also be seen.
Sam Stovall, CFRA market strategist says that stocks may not be punished much since the market has been through its bear phase and stocks have corrected to a large extent.
Tony Roth, investment officer from Wilmington Trust expects more upside than a downside in the market. However, Paul Hickey from Bespoke feels that stocks are not able to provide upside guidance and the market may retest December lows.
The S&P 500 which was almost on the verge of entering the bear market has turned. The Dow has been witnessing a rally after Christmas by almost 2,000 points.
Jerome Powell, the Fed Chairman has calmed the markets with his talk on the monetary policy which has added to the positive sentiment in the market.
However, the global economy is still seeing a slowdown. Stocks like Apple, FedEx, and Constellation have shown warning signs by bringing down their sale and profits forecast.
Alan Valdes from Silverbear Capital says that the economic numbers from America are quite strong though the neighborhood is not strong.
The Fed is expected to raise rates in March until which investors hope for the best from the market.