Hi, this is Tom and I will be helping Ken with investment and personal finance tips, news, and deals section.
As evident in the stock markets the past one week, investors have reacted strongly, in a negative way, to the global unrest in Egypt, bolstered by a handful of disappointing earnings reports, e.g. F5 Networks, Amazon Inc., Ford Motors.
However, I believe that the market will continue in an upward trend as we near the beginning of February, though a few bumps along the ride are expected, as the Egypt situation eases and a whole new slate of earnings reports are unveiled. If you have any shares in hand and trying to decide whether to sell then you should hold off a bit and probably even buy more of the stocks that fell due to over reacting. We'll see what happens next week and we can probably take the chance to pick up some more undervalued stocks.
Stay tuned for stock tips and advice for next week.
From Navellier:
ReplyDeleteFor the first time since the crash in 2008, the Dow crossed the 12,000 point mark. On Monday, DOW peaked at 12,021.24 points. It reached its highest point of 12,072.17 on Tuesday, but activity dropped at the end of the week, bringing many stocks down.
If the market's recent push to pre-crisis numbers isn't an excellent indicator of the economy's recovery, I don't know what is.
Though the market slowed down at the end of the week, we did have several stocks close the week out with gains. Our biggest performers of the week were: Silver Wheaton Corp. (SLW), up 3%; Apple (AAPL), up 3%; and Novo Nordisk A/S (NVO), up 2%.
Right now, the biggest force pushing our stocks higher is earnings season. We've had 9 companies report with an average earnings surprise of 5%. This has been a fantastic start, and I can't wait for the next 5 reports to come out next week. I have all the details from this week's report in the Earnings Roundup section.
Out of the 9 companies that have reported, we have had a few that missed expectations. We saw a drop in Amazon.com (AMZN) and Ford (F) this week. Amanzon has dropped 7% since its revenue in the latest quarter also failed to meet analysts' espectations. Ford slid 13% after its earnings took a large hit in the last quarter, thanks to a large one-time debt charge. While these earnings numbers were disappointing, I don't believe that they will negatively affect any of the companies for the long term.
The one thing I want you to remember is that during earnings season it's typical to see spikes and drops in the market. Earnings season brings attention to our companies, and that's exactly what we want. Our companies report strong numbers, and while a minority of investors will sell on that news to lock in their small gains, the majority of investors use that time to establish positions in strong companies. This sets up our next profit wave and is why we don't often sell into this changeover period. As long as our companies are meeting and beating analyst estimates, they will remain on our Buy List because our profits will continue to roll in.