Earnings beats are up this quarter, but next week’s lineup is the true test
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Market update: Stocks are rallying on Friday, with the S & P 500 trading at a record high and extending its gains to roughly 2% this week. The market is shrugging off concerns about a potential trade spat with Canada after President Donald Trump announced Friday that he was ending negotiations with the country. Instead, the market was driven higher by the slightly cooler-than-expected September CPI print. The reading brought a sigh of relief, easing concerns that the economy was facing a double whammy of a softening labor market with reaccelerating inflation. With the September CPI in hand, the market expects the Federal Reserve to cut interest rates by 25 basis points next week. Bank stocks are rallying today on expectations that lower interest rates will help stimulate economic activity. Earnings scorecard : Nearly one-third of the S & P 500 has reported earnings, and the results have been pretty good so far. About 82% of companies that have reported topped revenue forecasts, while roughly 87% exceeded profit estimates. This rate of beats is higher than the usual 62% revenue and 67% earnings beats, according to LSEG. Double beats — where a company beats on both revenue and earnings — are happening more often, too. Nearly three-quarters of the companies that have reported so far accomplished this feat, compared to about 69% and 54% in the second quarter and first quarter, respectively. Next week : As good as the quarterly results have been, next week is the real test. It’s the earnings gauntlet week, with more than 150 companies in the S & P 500 and 10 stocks in the portfolio scheduled to report. Within the portfolio, we’ll hear from Corning , Boeing , Starbucks , Meta Platforms , Microsoft , Bristol Myers , Eli Lilly , Amazon , Apple , and Linde . It’s also Fed week: On Wednesday, the Federal Open Market Committee’s two-day meeting will conclude with an interest rate decision. The market views a 25-basis-point interest rate cut as a virtual lock, but traders will want to get a better idea of whether a December cut is also on the table. On trade, President Trump is expected to meet with Chinese President Xi Jinping next Thursday in South Korea. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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