Weaker earnings will have an impact on the stock market, often leading to a decline in stock prices.
Lower earnings than expected signals to investors that the company’s financial health and growth prospects may be in jeopardy. This can lead to a decrease in investor confidence which translate ito selling which take the stocks to lower prices. I am not jet talking about all sectors where companies are cutting costs or reducing the workforce.
In summary, weaker earnings can have a significant impact on the stock market, often leading to a decline in stock prices and a decrease in investor confidence.
Allow me to share my thesis here: The bounce that started two days ago, on July 30th, began overnight and technically in an oversold $SP500. Neither Asia nor Europe were able to halt it. Later, the market rallied due to Powell’s comments, resulting in a short squeeze that concluded the day.
The Green 1 on the chart highlights the shorts closing and fueling new purchases, while the Red 2 highlights the low of today. The trigger for today’s sell-off was the ISM data.
To sum up, The $SPX and $NDX ended the day near the low of Tuesday and after the reports of $INTC and $AMZN we could expect lower confidence tomorrow. Amazon reported third-quarter sales guidance that missed analyst estimates, leading to a 4% drop in its stock after hours. The company guided to $154 billion to $158.5 billion in sales for the period, compared to analyst forecasts of $158.43 billion.
Intel also fell short of expectations, with the company announcing that third-quarter revenue will be far less than analysts’ expected and announced sweeping job cuts. This news caused Intel’s stock to decline by more than 13% after hours.
