This week we will see several high profile companies report their second quarter earnings results. Major players in various sectors, including streaming giant Netflix ( NFLX ), Taiwan Semiconductor Manufacturing Company ( TSM ) and chip maker ASML Holding ( ASML ), are all scheduled to reveal their financial performances.
Yahoo Finance markets reporter Josh Schafer breaks down market expectations for these earnings reports, examining what these earnings may reveal about broader market trends (^DJI, ^IXIC, ^GSPC).
For more expert insights and the latest market action, click here to watch this full episode of Catalysts.
This post was written by Angel Smith
Video transcript
Well, more earnings are expected this week on Wall Street with a preview of what’s to come.
We have our own Josh Schafer here in the studio with us, Josh.
Great to have you.
As always.
Are we still having the extended conversation here?
Is that the big narrative going into earnings, the expansion is definitely the big narrative going into earnings, right?
I mean, when you look at how the markets reacted over the last couple of days, Mattie, we’ve seen significant evidence of that expansion, right?
You have had equal weight S and P 500 exceeding the current S and P 500, two thousand Russells raising more than the S and P 500.
So I think that’s kind of the broad trend going into earnings, except for big tech, other sectors are going to show earnings growth and maybe more earnings growth and earnings surprises than expected.
That’s what Callie Cox at Ritholtz Wealth Management told me this morning that her number one thing she’s looking at is are they going to beat and surprise companies outside of the tech sector?
But I wanted to dig in a little bit this week and sort of what we’re looking at this week.
So obviously we’re out of Netflix. Netflix for me in these last couple earnings cycles has been a good test of companies that have outperformed the tech companies that have been high and their stock is already out. a lot.
So it’s been interesting just to see how investors react to the Netflix report.
Netflix may have a great report, but that doesn’t necessarily mean the stock goes up a bit, and maybe that tells us a little about the kind of risk appetite with the stock near all-time highs.
Will people want to take it higher?
Maybe you saw that maybe a little bit with Goldman Sachs this morning.
Pretty good ratio stocks are up about 1.5% last time I checked, but the stock has been on a tear just for the last month.
So that’s something to think about going into this.
And then the other two reports that I think will be interesting this week are that you have an SML and you have Taiwan Semi.
You remember in April, both of these companies had disappointing reports from the Wall Street Stand, stocks fell and semiconductors actually took a hit.
This was when NVIDIA dropped several days in a row.
In April, the market.
It was actually the most recent bottom of the market and it was kind of a sentiment scare.
Oh no.
Is, is the AI story in trouble?
Of course, NVIDIA reported and it wasn’t.
So, I don’t know, it will be interesting to watch.
That’s about midweek here, I think Wednesday, and it’ll just be interesting to see if that’s something we’re connected to.
Again, that story of these early chip companies.
And does this mean anything for the AI trade last quarter?
It didn’t end up mattering.
It mattered for a few days.
But when the actual chip company we cared about reported, it didn’t matter.
So I don’t know if that will probably work in this quarter, but it’s certainly in a week like that, we’re starting to get a little bit busier, but it’s not as busy with earnings.
I think that might be one of the main things, and we already know that NVIDIA has increased its orders for specific parts of what goes into a chip, right?
Wafers, for example.
So this is definitely a boost and takes care of TS MC moving forward.
And the stock has certainly had a great year.
Now taking a look at the stock over the past year here for TS MC, that stock is up over 85%.
So, another stock that has had a good earnings run, right?
And sometimes the bar is high is the right food.
I think going into earnings, everybody is talking about that high bar, the bar and the broad name.
That’s the two B’s for you guys.
All right, Josh, thanks so much as always for joining us.
We really appreciate it.