Forget tariffs. It's all about earnings this week on Wall Street

CNBC

5 days ago

Commerce Secretary Howard Lutnick said Aug. 1 is the " hard deadline " for countries to reach a trade deal with the United States. The market, however, didn't care. Stocks instead looked to start the week on a high note as investors turned their focus to a slew of major corporate reports due out this week. More than 100 S & P 500 companies are slated to post results, including Tesla and Google-parent Alphabet. Wall Street has a lot riding on some of these reports, as most of second-quarter earnings growth is expected to come from megacap tech. (For more on what to expect from some of the biggest reports this week, check out my latest Earnings Playbook .) .SPX YTD mountain S & P 500 year to date "Our view is you are going to need a notable 'beat and raise' across the board here for the most part, outside of an Alphabet where the expectations, valuations are a little bit more reasonable in nature," CFRA analyst Angelo Zino told CNBC's Frank Holland on "Worldwide Exchange" Monday morning. Alphabet, which reports Wednesday after the bell, trades at around 19 times forward earnings. Big Tech rivals Meta Platforms and Apple sport respective multiples of 27 and 29. One thing that can provide some comfort to Wall Street for now is that the reporting period is off to a strong start. FactSet data shows that of the 62 S & P 500 companies that have already posted results, 85% have exceeded expectations. However, RBC isn't fully sold just yet. "Overall, we exited week 1 of 2Q25 reporting season feeling like everything is fine, but not fabulous, and wondering if investors generally got what they expected but were hoping for a bit more," Lori Calvasina, the bank's head of U.S. equity strategy, wrote in a note Monday. She noted that companies reporting in the weeks ahead could signal trade-related pressure will hurt their bottom lines. This is despite investors looking beyond the recent tariff headlines. Morgan Stanley's chief investment officer Michael Wilson holds a more positive view, however. "Earnings momentum, positive operating leverage and cash tax savings are underappreciated tailwinds, in our view. We lean more toward our bull case (7200) by the middle of next year. While there should be some consolidation during 3Q, we think dips are meant to be bought," he said. Wilson's bull-case target signals 14% upside from Friday's close.