Earnings Misses Don’t Hurt

Published on

In his Daily Market Notes reportto investors,Louis Navellier wrote:

Earnings Misses

In a sign of market strength, both mega techs Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) missed slightly on revenues and earnings, including Microsoft disappointing on cloud growth and Alphabet missing on ad and YouTube growth, but the results were better than the bears feared and guidance was good enough that both bounced with Microsoft up 4.8% this morning and Alphabet up 5.6%, leading the overall market higher. If earningsmisses don’t hurt, what’s the overall risk?

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Q2 2022 hedge fund letters, conferences and more

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Today's durable goods orders were +1.9%, well ahead of the -0.4% forecast, was a big boost to easing recession fears.

Today, the Fed will announce their next rate hike with 75bps expected, with a small possibilityof a surprise 100bps increase. The comments made by JeromePowell about the increase willbe importantin framing expectations.

Better than Feared

A notableearnings yesterday was Chipotle (NYSE:CMG) which missed on revenuesbut had a nice earnings beat on price increases, wherein management said that lower-income customers had pulled back frequency but their main customer base of higher-income consumers were not discouraged by the higher prices. The company plans on more price increases next month. The stock is up 13.7% this morning.

In other news, pending home sales for June fell in all regions of the country as higher mortgage rates and continued higher prices hurt affordability. In a related data point, the average monthly payment for new cars climbed to a record $712 in May, with prices up 11.4% over the last 12 months, and used cars and trucks prices are up 7.1%.

Earnings are clearly driving the market, as they should, with plenty of important names left, but overall it has been much better than bears feared.

Big Day Tomorrow

Tomorrow is the single biggest day of the earnings season, both in the US and Europe.

Unless the Fed ruins the party, it's time to deploy some of your dry powder into companies that have demonstrated the ability to grow profits in today's higher inflation economy.

Coffee Beans

One of Europe's answers to its energy crisis is the increase of liquefied natural gas (LNG) imports, with the U.S. being one of the main benefactors of this shift. In the first half of 2022, the U.S. became the world's largest LNG supplier, with 71% of its exports going to the EU and the UK. Source: Statista. See the full story here.

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