VIDEO: A Huge Week of Earnings Is on Tap for the Market and Portfolio

In today’s Daily Rundown video, Chris Versace gets us ready for the coming week as the market looks to find its footing and earnings season shifts into a higher gear. 

He discusses what we’ll be looking at with more than 900 companies scheduled to report, including 145 S&P 500 names and nearly one-third of the portfolio. 

Transcript

CHRIS VERSACE: Hey, folks. Chris Versace here, Friday April 19. And as I'm coming to you, stocks are mixed, oil is off slightly, and gold is on track to put in its fifth best week as the market contemplates kind of what's next between Israel and Iran.

I'm sure you saw the news that Israel did retaliate of sorts on Iran last night. But it seems that we're starting to see some calmer heads prevail. Iran saying that it may not need to retaliate against Israel for this. This would be a welcome sign. We could see some derisking going on in the market. But I do think that we're going to need to see some time elapse to make sure that things are as calm and collected as some folks are thinking.

We'll also kind of want to watch the implications of the weekend news cycle. And that, of course, means keeping our eyes on not only our XLE shares, but also GLD as we come into next week. In terms of today, no real major economic data points. And we've only got one Fed speaker, Chicago Fed President Austan Goolsbee.

For those who may not be as familiar with him, he's been one of the more dovish Fed heads. But candidly even he has to realize the strength of the economy given the data that we saw this week, as well as inflation. I also think that it's far more important to listen to the collective comments from the various Fed heads. And as we shared in our opening comments this morning, there was a barrage of them yesterday pretty much signaling no need to rush to cut rates.

If anything, what we heard is more confirmation that they're likely to be fewer and late in the year. So we'll continue to watch that. With that in mind, we do have some fresh economic data that will be key coming at us next week. We talked a little bit about it, but it will be the April Flash PMI. We'll be watching for what it says about the tone of the economy, but also input, output cost comments.

As we continue to remind you, those have been probably the best leading indicator for what we eventually see in the coming inflation data. So we'll be breaking all of that down and sharing our thoughts with you on that. But again getting back to today, we're likely to see the market try and claw back some of the losses over the last several trading sessions. But again, I think to see really a pronounced move higher in the market we're going to need to see distance from the recent Middle East conflict that has really kind of bubbled up and kind of, let's just say, renewed or brought back that sense of fear in the marketplace.

But the other thing that as we move into next week that we'll want to be paying attention to is earnings. We've started to see the earnings season pick up steam. It's going to accelerate even further. And that will be especially true for the portfolio, because next week alone we've got earnings from Amazon, Google, Lockheed Martin, Mastercard, Microsoft, Vulcan Materials, Waste Management, and our latest addition to the portfolio, Labcorp.

As we parse these reports and the number of others coming at us, we're going to be doing a few things. First, we're going to be revisiting our price targets, revisiting our investment thesis for all of our holdings that are reporting next week. We'll be making moves with those kind of as we need to. We'll also be connecting the dots between the data points that we get in and around our various portfolio companies as they relate to others.

So for example, when Google, Amazon, and Microsoft report, we are going to want to be very interested in what they have to say about data center spending, but also what their efforts on AI chips are shaping up to look like. That's going to have implications not only for Nvidia, but also Marvell. Because remember, Amazon, Microsoft, and Google are fabbing or designing, I should say, their own chips. And of course, Marvell is one of their partners for that effort. That's one of the reasons why we like Marvell shares so much.

But we'll also be looking and collecting data points from companies that aren't in the portfolio but could have bearing on the portfolio. This list of companies includes companies like Logitech, UPS, Meta Platforms, Caterpillar, Lam Research, Intel, and a host of others. Now, as we collect the reports not only for the portfolio companies and those outside, the other thing that we'll be doing is watching the market's reaction to those reports, really looking to see how they're received. Is good news good enough or is bad news, you know, really bad news? And if that's the case, we'll want to gauge the market's reaction to potential disappointments as well because that'll give us a sense of the market's mood. It'll also help us of get our head in the game as we kick into gear with another layer of earnings season.

And I say that because next week there's going to be over 900 companies reporting. Roughly 145 of them will be S&P 500 companies. Now to get ready for that, we will be reviewing what we learned over this week that will help set the tone. But we'll also, as we go into that barrage of earnings, we're going to want to continue to watch the market technicals as well. We'll be keying on key support levels not only for the S&P 500, but for the other major indices as well. But we'll also be looking at them for a number of our different holdings.

I say this because there are several that have pulled back meaningfully over the last couple of weeks. The market itself, the S&P 500 is down about 4.5% or so quarter-to-date. And we've taken some opportunities in that market pullback. Remember that from time to time a couple times a year we can see a cumulative 3% to 5% move lower in the market. It's not necessarily a bad thing. And candidly coming off of what we saw posted by the S&P 500 and some of the other major market indices in the back-to-back quarters of December and March, we would argue that what we're seeing is this period of consolidation, froth coming out of the market.

We've talked about this before in the past and we continue to think that it's actually a incremental positive for us as investors because the pullback gives us opportunities to pick up well positioned companies at better prices. And we've done some of that this week by adding to our positions in Nvidia, as well as Universal Display. Twice, I might, add for Universal Display. But it also allowed us to pick up shares of Labcorp yesterday.

It's one that we've been kind of eyeing. We talked about that yesterday. And we do want to build out that position. But there are a few others. There's also some larger position sizes in the portfolio that because of the pullback in the market, we've got some potential opportunity to pick up some additional shares. Now, I can't say that we're going to be doing this immediately because we are going to want to navigate the market next week.

Again, we're going to be getting that April Flash PMI data. We'll be getting that barrage of earnings. And the odds are the market's going to be volatile. But volatility for us as investors can be our friend. So we're going to want to continue to be, I should say, opportunistic. And that's kind of our plan as we head into next week.

We've got some cash still on the sidelines. And at some point we will exit, as we've talked about, our inverse ETFs. So let's see what the weekend news cycle brings. Let's see what the initial start of earnings and the market's reception brings. And based on that, we will make our next moves with the portfolio.

Thanks for watching. And remember, members, please be sure to check your emails, your inboxes, your alerts. We really want to make sure you're getting our latest thoughts and any moves that we happen to be making with the portfolio. And again, thanks for watching. Have a great weekend.