VIDEO: What We're Watching for in a Big Earnings Week

In today’s Daily Rundown video, Chris Versace reviews the drivers that have led one of the best-performing weeks in some time for the S&P 500, the Nasdaq Composite and the Pro Portfolio. 

As part of that discussion, he touches on a few areas of the market that are not performing as well, ones that the Portfolio has little exposure to. Chris also outlines some of the earnings we’ll be focusing on next week that will dictate the market’s next move and explains why we’ll continue to “connect the dots” as another hefty slug among the S&P 500 companies report.

Transcript

CHRIS VERSACE: Hey everyone, Chris Versace here. It is Friday, April 25th, which means we are closing out the week. And while the S&P 500 may be up modestly today, I have to share that it's shaping up to be one of the better weeks that we've seen in some time for the S&P 500.

Obviously helping along with that were some of the earnings reports that we saw this week that were better than feared. From a portfolio perspective, quarterly results from ServiceNow, United Rentals, Alphabet last night all looking very good and helping bolster the portfolio, closing the gap to the S&P 500.

But I also have to say that if you look at the NASDAQ composite, boy oh boy, is it having a very strong week as well. To that, we can trace back not only the comments from Alphabet last night, but some of the ones that we shared with you from Digital Realty Trust, from Intel, but also, if we go back a little bit further in the week from what Amazon had to say about AI and data center, the same from NVIDIA.

A lot of the concern about the slowdown in that part of the market has really come off. And I think we're seeing folks really start to revisit it, and I think we'll see a lot more of that next week when we hear from Microsoft, Meta, Amazon and we take a look at their capital spending levels. But so far, it appears that demand is going to remain rather robust, and some of that fear is coming off.

But from a portfolio perspective, we saw benefits there, not only with NVIDIA, Eaton, and Marvell, but there are other holdings in the portfolio that are also benefiting as well. I already mentioned ServiceNow. But we can look at the strong move in Palantir, and we will have to revisit that price target yet again. Axon had a very good week, Elastic as well, and of course, Universal Display really coming off of those comments from LG Display that we shared with you yesterday.

Simply put, if you missed it, those comments really reaffirm the accelerating adoption of organic light-emitting diode displays, not just in smartphones, but in other display types, whether it's PCs, monitors, and other end applications, including automotive. So we look for them to have a very good earnings report next week. But we're going to talk more about all of that in today's weekly roundup, as well as why we will continue to connect the dots like we did last week and this week really in anticipation of what our holdings were going to say as they reported.

And I have positively to say that the data points that we pulled together-- the insights from those other earnings reports were really constructive and helpful, and it had us properly prepared. But I will say that as we look forward to next week, man, oh man, it was a busy week. This week, it's going to be even busier, with another hefty slug of the S&P 500 reporting.

That includes a number of key constituents for that market barometer-- again, Microsoft, Amazon, Apple, Meta. We talked about it earlier this week, but just to remind you, that cohort alone accounts for 18-plus percent of the S&P 500 by market cap. So what those companies have to say will be extremely important for the direction of the market following this week's move higher.

Now, I will say that based on what we've seen thus far, the risk of a major downside surprise-- likely low for those companies. But we will be want-- excuse me-- we will want to remain on our toes. And as we've talked about earlier this week, conference calls and the comments from management teams about their outlook, the impact of tariffs, and other things will be important.

Now, here's the other thing. Yes, we have performed extremely well this week. I chalk that up to the positions that we have in the portfolio. But as we look back on this week, we do see that there are other parts of the economy, other market sectors that aren't doing as well. Case in point-- personal product companies-- Kimberly-Clark, Procter & Gamble, Clorox all talking about the impact on their cost structure of tariffs, all walking back their earnings expectations for 2025.

We could say the same thing for airlines and hospitality. We are seeing the numbers of travelers coming into the US really start to soften. That's going to have an impact on international travel and most likely hospitality. That does explain why American Airlines pulled their guidance. It also explains why United offered a dual set of guidance, something you don't see very often. We'll continue to follow the TSA numbers. That should give us some insight into overall travel demand, but we'll look for other data points about international travel as well.

And one other area that I think we're going to see consumers continue to cut back on-- dining out. In fact, we have a signal about that very data point tomorrow, Saturday, when we share our next round of Saturday signals. So please be sure to look for that. Also, some comments earlier this week from Chipotle. Be interesting to hear next week from Yum Brands, Starbucks, and others, and I think Wendy's is in there as well.

So again, we have another hefty slug of S&P 500 companies reporting. And even though we are well positioned, we are going to continue to update our thinking by connecting the dots as more companies report their quarterly results. Coming up later today, we do have Friday weekly roundup. Over the weekend, as I just mentioned, on Saturday, please be sure to take a look at the next signals alert. There's a lot of insightful stuff ripped from the headlines-- confirmation data points that I think you'll enjoy. If you haven't been reading that Saturday alert, I would strongly encourage you to do so.

I would also strongly encourage you to listen to the podcast conversation this week with Jay Woods. Really insightful conversation. Jay is a good guy, and he will be a recurring member of the podcast team. So I would encourage you to get familiar with him. Again, listen to the podcast, or if you want, read the transcript. Either way, I think you're going to find it very value add.

While you're doing all of that over the weekend, hopefully resting as well, we will be getting prepared for next week, and that means watching weekend developments in Washington. With that, my friends, have a wonderful weekend. We will see you back here, bright eyed, b