• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

A Few Solid Earnings Reports May Not Be Enough to Turn This Market

Tesla reports after Wednesday's close and will be of particular interest as Elon Musk may need to liquidate shares to fund his purchase of Twitter.
By JAMES "REV SHARK" DEPORRE
Oct 19, 2022 | 07:43 AM EDT
Stocks quotes in this article: NFLX, ASML, UAL, TSLA, TWTR

The market gapped up and sold off on Tuesday but managed to hold on to some good gains. The question now is whether the bulls can generate sustained upside momentum as they digest earnings reports.

There were a few solid reports overnight. Most notably, Netflix (NFLX) , ASML Holdings (ASML) and United Airlines (UAL) posted solid beats and are trading higher. However, the issue is whether this action spills over into the broader market, which is still awaiting key reports that may give more evidence about overall economic strength and the impact of inflation.

The most interesting report coming up tonight is Tesla (TSLA) . The stock has been under pressure largely due to concerns that Elon Musk may need to sell substantial Tesla shares to fund his purchase of Twitter (TWTR) , a deal which is moving closer to resolution. It is estimated that Musk may have to sell more than $8 billion of Tesla shares, and he will be free to do so after the blackout period ends tonight when earnings are reported. Even if Tesla does have a good report, any Musk sales will be a strong headwind for the stock.

Overall, market conditions have not changed much. There was another very energetic bear market bounce and increased volatility over the last four days, and now the issue is whether support will hold and provide a foundation as we head into the meat of earnings season.

The Fed is on deck to raise rates by 75 basis points in less than two weeks, and there are no indications that economic conditions are improving. Bulls hope the market has discounted most of the bad news out there, but there is no certainty about what the level of bad news will be going forward. It is tough to discount the future when you don't know what it holds.

The key is to stay focused on the price action. The reversal after the gap-up open on Tuesday indicates there is still a high level of negativity out there, and the market may not be able to run if a high level of negativity is the main positive factor driving the action. We need actual good news rather than just hope that the bad news is already priced into the market.

My game plan is to continue to hold high levels of cash and wait for individual stock picking to improve. I will take advantage of short-term volatility if I can, but I still see little reason to rush to build positions right now. I'm not confident that earnings season is going to be a turning point for the market.

Futures have reversed to the downside before this morning's open after jumping overnight on Netflix.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Rev Shark had no positions in the stocks mentioned.

TAGS: Earnings | Indexes | Investing | Stocks | Airlines | Digital Entertainment | Media | Semiconductors & Semiconductor Equipment | Real Money | Earnings Preview | Electric Vehicles

More from Stocks

Bearish Bets: 3 Stocks You Should Really Consider Shorting This Week

Bob Lang
May 28, 2023 10:30 AM EDT

These recently downgraded names are displaying both quantitative and technical deterioration.

I See a Way to Make Some Bread Off of Toast Inc.

Bret Jensen
May 28, 2023 7:00 AM EDT

Here's an options play on this software company for the restaurant industry.

Don't Just Sit There and 'Hope' for Your Stocks, Make a Decision

James "Rev Shark" DePorre
May 27, 2023 10:00 AM EDT

The biggest investing and trading mistake that people make is that they don't have a plan.

Nvidia Caught Traders Off Guard, Will Debt News Do the Same Soon?

James "Rev Shark" DePorre
May 26, 2023 4:57 PM EDT

We got a broad rally on Friday after a week of narrow action -- but once the debt ceiling news hits, the market will go on to the next stage of action.

Here's What Should Recharge Tesla's Rally

Bruce Kamich
May 26, 2023 3:45 PM EDT

I have a new price target for now.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:48 AM EDT CHRIS VERSACE

    Latest AAP Podcast With Portillo's CEO!

    Listen in as we talk with a rising star in the Chi...
  • 03:25 PM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Don't Just Sit There and 'Hope' for Your Stocks, M...
  • 07:32 AM EDT BOB LANG

    Webinar Thursday After the Close: Option Spread Trading

    Thursday, my good friend and colleague Sam DeMarco...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login