• 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
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

The Market Refuses to Embrace Negatives as Major Earnings Reports Roll In

So far, earnings season has not been the obstacle that many have feared.
By JAMES "REV SHARK" DEPORRE
Apr 27, 2020 | 07:51 AM EDT
Stocks quotes in this article: GOOGL, AMZN, AMGN, AAPL, FB, GILD, MCD, MSFT, BRK.A, BRK.B

Although there is no obvious positive news Monday morning, stocks are set to gap-up at the open. Crude oil is trading down, which was a problem last week, but there is optimism about the more important earnings reports of the quarter. Covid-19 statistics continue to show improvement and the push to reopen the economy is gaining steam.

The main reason that there is strength in the indices again Monday morning is that far too many market players are unprepared for it. For weeks now there has been puzzlement over the market's ability to shrug off the worst financial crisis any of us have ever seen, although even the bears will admit that nearly $10 trillion in stimulus overcomes nearly any logical negative argument.

Earnings will be the main focus this week with reports from a slew of heavyweights, including Alphabet (GOOGL) , Amazon (AMZN) , Amgen (AMGN) , Apple (AAPL) , Berkshire Hathaway (BRK.A) (BRK.B) , Facebook (FB) , Gilead Sciences (GILD) , McDonald's (MCD) and Microsoft (MSFT) .

So far, earnings season has not been the obstacle that many have feared. While guidance has been withdrawn and there is limited short-term clarity, the response has not been overly negative and has not had any major impact on the market.

Optimism about progress in the Covid-19 battle has been the main positive. While there is much controversy over reopening the economy too early in a number of states, the market appears to like that there is such strong pressure to return to "normal."

The primary reason this market remains strong is liquidity. There continues to be a large amount of idle cash looking for a place to go. The fear of missing out on a fast and furious recovery outweighs the concerns about the significant economic damage that is being done. There is no way to quantify what the economic impact of this crisis might be so market players are erring on the side of optimism at this point. They have the Fed on their side and there is no more powerful force.

Technically, the S&P 500 has done a good job of working off overbought tendencies in the last two weeks as it has chopped around and held up very well. It is developing a base of support that is supporting the move higher Monday morning.

My thesis has been that we would see a trading range develop. This trading range has greater relative strength than I anticipated but it has been healthy. There have been narrower trading ranges lately and better individual stock-picking but that has been driven in part by the widely held belief that this market strength is not justified.

While the reaction to earnings this week will help determine where this market is heading next, the very stubborn support suggests that market players are not going to panic easily. We have some clear technical support and resistance developing and that is going to trigger the next big move.

(Alphabet, Facebook, Apple and Amazon is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.)

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 has no positions in any securities mentioned.

Action Alerts PLUS, which Cramer manages as a charitable trust, is long GOOGL, AAPL, AMZN, FB and MSFT.

TAGS: Earnings | Federal Reserve | Investing | Markets | Stocks | Trading | Earnings Preview | Coronavirus

More from Stocks

As Pioneer Natural Resources Blazes a Trail Higher, We Have New Price Targets

Bruce Kamich
May 25, 2022 2:50 PM EDT

Here's our updated bullish strategy on PXD.

Sell the Rumor and Buy the News on Dick's Sporting Goods

Bruce Kamich
May 25, 2022 12:24 PM EDT

Wednesday's down to up move makes trading decisions more complex.

Toll Brothers: We're Going to Need a Bigger Base

Bruce Kamich
May 25, 2022 11:36 AM EDT

The homebuilder's charts need more base building for me to get more constructive.

Insiders Are Stepping Up and Buying Shares in These 2 Companies

Bret Jensen
May 25, 2022 11:30 AM EDT

A provider of technology for managing smart homes and a financial services concern are finding interests from directors and officers.

Have You Noticed This Shift in the Market?

James "Rev Shark" DePorre
May 25, 2022 11:00 AM EDT

Bonds tend to gain strength, and interest rates decline as worries about a recession increase.

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

  • 11:33 AM EDT PETER TCHIR

    Thoughts Ahead of the Fed Minutes

    Recent economic and earnings issues are convincing...
  • 02:24 PM EDT PAUL PRICE

    An Interesting Chart

    I'm betting heavily that stocks will be way up aga...
  • 10:10 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    "Market Timing for Dummies"
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 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