Strong start for earnings season creates support for Wall Street's record highs

6 days ago

The opening week of earnings season has given Wall Street bulls plenty to celebrate, helping the S & P 500 hit new highs. Earnings season kicked off with the big banks, which mostly delivered positive results for the quarter. Continuing the strength in financials, Interactive Brokers and Charles Schwab moved higher on Friday after their earnings reports. Even some stocks that were falling after their reports, including Netflix and 3M on Friday, beat Wall Street expectations for the second quarter on the headline metrics. According to FactSet senior earnings analyst John Butters, 12% of S & P 500 companies have already reported their quarterly results. Of those, 83% have beaten Wall Street expectations for earnings per share, which is above the five-year average of 78%. The percentage of companies that have posted a positive revenue surprise is also 83%. Of course, expectations have fallen over the course of the year, so the beats aren't necessarily as impressive as those in some prior quarters. Still, Michael Arone, chief investment strategist at State Street Investment Management, said the story of the first week of earnings season is "so far, so good." That goes for the results themselves, as well as the outlooks and commentary from management. "There is an opportunity here for corporate executives to suggest, 'hey, the outlook's just too murky so we're not going to provide that guidance.' Yet I feel like not only has it been more optimistic than I would have thought — particularly from the big banks — but also a bit more clear. And then I'm surprised at the confidence or the conviction that they're providing with that future guidance," Arone said. .SPX 5D mountain The S & P 500 hit an intraday record on Friday. One thing helping earnings appears to be the weaker U.S. dollar, which can make earnings generated overseas look stronger to domestic investors. PepsiCo and Netflix were among the companies that have highlighted that change this week. Arone said that could continue to boost tech company results in particular as the earnings season progresses. One caveat is that earnings reports tend to be grouped by industry, and the stats and narrative can change as different sectors take their turn in the hot seat. Arone highlighted retailers as a group he is keeping an eye on. "The big retailers, they typically report later on in earnings season, so it will be interesting to see what they're suggesting about consumer trends," such as whether customers are trading down to cheaper goods, Arone said.

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As Consumers Lose Their Appetite, Food Brands Fight to Keep Wall St. Happy

New York Times

28 minutes ago

New York Times

As Consumers Lose Their Appetite, Food Brands Fight to Keep Wall St. Happy

For generations, Cool Whip topped pies. Tropical punch Kool-Aid was served at children's birthday parties. And an Oscar Mayer bologna sandwich was a lunchbox staple. But in recent years, the big packaged food brands that dominated American pantries and refrigerators for decades are struggling as consumers spend less on brand-name cookies, spaghetti sauce and cream cheese. The companies are grappling with a number of stressors. Shoppers, feeling pinched by higher food prices over the past two years, are cutting back or trading down to less expensive private labels. Others are eschewing highly processed foods for healthier, more natural items. And the continued rise of weight-loss drugs like Ozempic are reducing cravings for sugary and salty snacks. Among the debates consuming executives in boardrooms of U.S. food companies is which brands consumers are buying and avoiding — and how large and lasting the impact of the weight-loss drugs will be, said Charlie Hadid, Morgan Stanley's head of consumer investment banking in the Americas. As growth in the packaged goods industry stalls, its stocks have lagged. While the broad S&P 500 index has gained 40 percent over the last two years, an index of food and beverage stocks has flatlined. To jump-start growth and satisfy investors, companies are starting to re-engineer some of the big deals of the past, banking on a smaller-is-better, or narrower-is-better, strategy. Source: FactSet By The New York Times Want all of The Times? Subscribe.

Wall Street Is Challenging the Low-Cost-Investing Revolution

Bloomberg

28 minutes ago

Bloomberg

Wall Street Is Challenging the Low-Cost-Investing Revolution

Ordinary investors have won the battle of fees. The challenge will be holding on to that victory as Wall Street mounts a counteroffensive. Investing today is as easy as opening a free brokerage account and buying a low-cost, commission-free index fund that tracks the broad market, then sitting and marveling as it blossoms. Since I started my first professional job in the mid-1990s, an investment in a cheap S&P 500 Index fund would have grown more than 17-fold, beating virtually every professional investor over that time.

BofA's Hartnett Renews Warnings Around Bubble Risks for Stocks

Yahoo

an hour ago

Yahoo

BofA's Hartnett Renews Warnings Around Bubble Risks for Stocks

(Bloomberg) -- The risk of a bubble in stock markets is rising as monetary policy loosens alongside an easing in financial regulation, according to Bank of America Corp. strategists. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Can This Bridge Ease the Troubled US-Canadian Relationship? Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom The team led by Michael Hartnett said the world policy rate has fallen to 4.4% from 4.8% in the past year as central banks in the US, UK, Europe and China slashed borrowing costs. The rate is forecast to drop further to 3.9% in the coming 12 months, he said. At the same time, policymakers are considering regulatory changes to boost the share of retail investors in the US. 'Bigger retail, bigger liquidity, bigger volatility, bigger bubble,' Hartnett wrote in a note. The strategist correctly forecast that international stocks would outperform the US this year. He had warned in December that equities were beginning to look frothy after a strong rally in 2024. The S&P 500 Index sank as much as 18% after he issued that call, before rebounding in early April. Hartnett said again in June that stocks could end up in a bubble on the back of expected rate cuts. US stocks have rallied to record highs on optimism around resilient economic growth and corporate earnings even in the face of higher tariffs. Still, the benchmark S&P 500 is trailing international peers this year. Some market forecasters such as Morgan Stanley's Michael Wilson have said there's reason to remain bullish on stocks given positive earnings momentum, robust operating leverage and cash tax savings. However, strategists at JPMorgan Chase & Co. and UBS Group AG have warned the market may be getting too complacent about lingering trade risks. Focus next week will be on the Federal Reserve's policy meeting for clues on the path of rate cuts. --With assistance from Michael Msika. Burning Man Is Burning Through Cash Elon Musk's Empire Is Creaking Under the Strain of Elon Musk It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Confessions of a Laptop Farmer: How an American Helped North Korea's Wild Remote Worker Scheme A Rebel Army Is Building a Rare-Earth Empire on China's Border ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data