Earnings are the heartbeat of the market - and every week brings a fresh set of opportunities and risks. With each report, we get new information about corporate health, investor sentiment, and the sectors driving leadership (or lagging).
In the Weekly Beat, we spotlight the most important earnings reactions from the prior week - the winners, the losers, and the surprises that moved markets. Then we shift our focus forward, breaking down the biggest setups and expectations for the week ahead.
Whether itβs mega-cap leaders, niche growth stories, or the sectors most tied to the economy, weβve got you covered on what traders need to know right now.
There weren't any S&P 500 earnings reactions to discuss, so we dove into a Bitcoin miner that recently had its second-best earnings reaction this cycle. Its name is Applied Digital $APLD.
APLD surged 16% following a double beat, decisively breaking above its prior cycle peak. The company reported a revenue surge of 95% year-over-year, driven by expanded long-term lease agreements with CoreWeave $CRWV.
The only S&P 500 earnings reaction came from the $48B supplier of fasteners, tools, and safety gear, Fastenal $FAST. Following a mixed earnings report, the stock suffered a -7.5% earnings reaction.
Net income grew by 12.6% year-over-year, thanks to margin expansion. However, the management team issued much weaker-than-expected forward guidance, which fueled the negative earnings reaction.
The best earnings reaction came from the $271B bank, Wells Fargo $WFC, which reported a double beat, resulting in a +7.2% earnings reaction. In addition to exceeding expectations across the board, the management team raised its forward guidance.
At the bottom of the list was the world's largest bank, JPMorgan $JPM, which reported a double beat, but suffered a -1.9% earnings reaction. Everything about this report was tremendous, but Mr. Market didn't reward. This indicates that all of the good news was already priced into the stock.
The best earnings reaction came from Prologis $PLD, which is the world's largest owner of logistics and warehouse real estate. Following a double beat, the stock rallied over +6% for its best earnings reaction of the 21st century.
At the bottom of the list was the $133B provider of auto, home, and commercial insurance, Progressive $PGR. This was terrible... The company missed expectations across the board, and fell nearly -6%. Additionally, this move marked the decisive resolution of a prolonged distribution pattern.
The best earnings reaction came from J.B. Hunt Transport Services $JBHT, the world's third largest integrated freight & logistics stock. They decimated the market's expectations and rallied over +22% for the best earnings reaction of the 21st century. This move also repaired what was previously a decisive resolution of a massive top.
At the bottom of the list was the world's largest insurance broker, Marsh & McLennan $MMC. After exceeding all expectations, the stock suffered its worst earnings reaction since the Great Financial Crisis.
What's happening next week π
Next week, we'll hear from a variety of industry leaders. There will be a ton to unpack at the Beat Report.
At the top of our radar will be Tesla $TSLA, GE Aerospace $GE, and Newmont $NEM.
We'll also be watching:
The world's largest entertainment stock, Netflix $NFLX.
Two of the largest railroad stocks in the world, Union Pacific $UNP and Norfolk Southern $NSC.
The robotic-assisted surgical solutions leader, Intuitive Surgical $ISRG.
And the semiconductor giants, Texas Instruments $TXN and Intel $INTC.
It'll be an exciting week for readers of the Beat Report, so make sure you don't miss a beat.
Now, letβs dive into the top setups heading into next week.
Here's the setup in TSLA ahead of Wednesday's earnings report π
Tesla is expected to post $26.27B in revenue and EPS of $0.55 after Wednesday's closing bell.
After rallying +3,300% from the 2019 low to the 2021 high, the stock has been stuck in a massive sideways range. Until now...
Last month, the price gapped above the 2021 high, and has been coiling for a few weeks, waiting for this week's earnings report.
If the company delivers what Mr. Market wants to hear, we believe a fresh leg higher to new all-time highs will follow.
On the flip side, if the company disappoints, a quick move lower into the prior range will likely follow.
Technically speaking, TSLA has a lot riding on this quarter's earnings report.
Here are the past 3 years of earnings results & reactions for TSLA π
This time last year, Tesla had its best earnings reaction in decades. Since then, the stock has been rewarded for two of three earnings reports, and we have a feeling it's about to be rewarded for three out of four.
As you can see, the two positive reactions after last October's historic move have come after double misses. The market is telling us loud and clear that it doesn't care about the current quarterly results - it's all about future growth.
That's why investors will be listening closely to Elon Musk's commentary in the conference call, and less so to the headline results.
If Elon comes through, we expect TSLA to be rewarded for its earnings event.
Here's the setup in GE ahead of Tuesday's earnings report π
GE Aerospace is expected to report $10.38B in revenue and EPS of $1.46 before Tuesday's opening bell.
Heading into the report, the price is in a tight coil above the peak from 2000. Since the summer of 2022, the stock has emerged from the ashes, rallying over 700% in a vertical line.
With tremendous relative strength and momentum carrying the stock, we see no reason for the uptrend to end here.
And when you zoom out, it's impossible to be bearish if the price holds above the .com bubble peak. This is a massive base, which could send the price into outer space.
So long as GE holds above 290, the path of least resistance is decisively higher for the foreseeable future.
Here are the past 3 years of earnings results & reactions for GE π
Over the past three years, GE Aerospace has been consistently delivering extraordinary bottom-line growth, and the market expects that trend to continue this quarter.
Do you see the pattern in the reaction trend? Back-to-back positive reactions, followed by a negative reaction. Over and over again.
With last quarter's slightly negative reaction, we want to bet the next two will be positive, as the pattern suggests.
And if GE rallies after its report on Tuesday, we expect its aerospace & defense peers to do the same. As you can see on the earnings calendar above, RTX $RTX and Lockheed Martin $LMT also report before Tuesday's opening bell.
With GE trying to emerge from a 25-year accumulation pattern, a lot is riding on this quarter's earnings report.
Here's the setup in NEM ahead of Thursday's earnings report π
The market expects Newmont to report $5.18B in revenue and EPS of $1.43 after Thursday's closing bell.
This is the world's largest Gold miner, and it's just now breaking out of a massive base that began in 1987. To show the chart, we had to use quarterly candlesticks... That's how big the base is!
With Gold prices at all-time highs with historic momentum behind it, the market knows this company is printing money right now.
And with NEM just now emerging from a nearly 40-year accumulation pattern, the uptrend has plenty of room to run.
So long as NEM is above 82, the path of least resistance is higher for the foreseeable future.
Here are the past 3 years of earnings results & reactions for NEM π
Over the past three years, Newmont has been growing its top and bottom lines like never before. Despite this fundamental strength, the market has had mixed feelings about it according to the earnings reaction history.
However, you can see the past two earnings reactions have been positive as the stock is climbing out of the massive base we previously mentioned.
With the momentum heading into the report firmly in control by the buyers, we see no reason why the market wouldn't reward NEM for a third consecutive quarter.
Happy Sunday
-The Beat Team
P.S. The crypto market just had the biggest liquidation event ever. On Thursday, Louis Sykes will reveal which cryptos will emerge from the ashes, and which won't.
