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Investors Are getting Ready For Earning Reports
15.07.2022

The stock market and investors are getting ready for earning reports which will soon start coming in thick and fast. JP Morgan and Morgan Stanley’s financial statements were released last night, including comments from the company’s hierarchy.

The price movement of the SNP500 declined by a total of 0.30% during yesterday’s trading session followed by a further decline of 0.25% during today’s pre-market futures. The price during yesterday’s trading session at first saw a significant decline before gaining momentum and closing the session only slightly under the market open price.

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The price movement of the SNP500 is strongly being influenced by the high inflation rate and monetary policy. However, traders are now turning their attention towards the earning reports. Over the next two weeks, large companies such as Netflix and Tesla are scheduled to release their Earning Reports.

Morgan Stanley confirmed a net profit of $13.1 Billion and an earnings per share of $1.39. Both figures were a disappointment for investors as the company’s net profits were much lower than the year before. In addition, the earnings per share turned out to be much lower than the predicted $1.55 and the $2.06 in the first quarter of the year.

JP Morgan also slightly underachieved compared to expectation. The company confirmed an earning per share of $2.76 compared to the $2.88 expected by the market. However, the EPS was slightly higher than the previous year. It should be noted though, that the stock was pressured by reports that the company has seen a strong increase in “bad loans”. Non-performing loans now mount $428 Million. JP Morgan’s CEO Jamie Dimon warns geopolitical tension, high inflation, and waning consumer confidence could hurt the economy “sometime down the road.”

Netflix is also another stock which has been under continuous pressure since the previous earnings report. The company is due to confirm its earnings next week and is trying to amend existing agreements with leading entertainment studios to host ad-supported content. The company is planning to launch the service by the fourth quarter of this year but the move has not been met with positive consumer response. It is reported that Netflix is in talks with Warner Bros, Universal, and Sony Pictures. According to preliminary estimates of experts, the studios may well expect a premium of 15–30% of existing contracts.

The company's financial report will be published on July 19th. The revenue for the past quarter is predicted to be $8.04 Billion, surpassing $7.87 a quarter ago. Earnings per share may reach $2.98, slightly lower than $3.53 shown in the previous period.

Over the next week, analysts will continue to monitor investor confidence and risk appetite which can have a significant impact on the performance of the stock market. The investor confidence and risk appetite will also be connected with the level of inflation and monetary policy. The upcoming quarterly earning reports is also another factor that impacts investment activities.

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