Is there a dark shadow looming on Q4 Earnings Season?

Yesterday I wrote all about the talk of tariff wars, and how China’s thrown Apple through a tailspin.

In case you’ve missed it, Samsung is following Apple’s lead, by pre-announcing poor earnings due to issues with China as well.

What does this mean for traders?

Simple, look for a domino affect this earnings season, of companies with China exposure coming out and giving us hard core facts after months of speculation surrounding the tariff wars impact on corporate profits.

The stock market is teeter tottering on the brink, after a Powell induced rally on Friday sent it directly into technical resistance. As I discussed yesterday, President Trump is meeting with Chinese officials yesterday and today. The results of this meeting could easily send the stock market roaring higher. I’m planning to watch the address (or at least follow it on Twitter) to see the tone of his comments.

Today, stock market action is telling me that we may continue trading higher this week. But, don’t forget about warnings from companies like Apple and Samsung. This is a foreshadowing of what’s going to come during earnings season.

Next week, the banks will kick off the beginning of earnings season with the bank stocks like JPM, GS, and C reporting earnings. Even if the stock market continues to rally this week off of China news, I think the next line in the sand the market will face is earnings.

This earnings quarter will be absolutely critical to the stock market and its overall direction in 2019. If more companies continue to report slowing profits and lowered guidance, this’ll be further proof that the economy is in fact slowing down. How investors react to that has the potential to send us into a downward spiral, with the stock market potentially leading us to a recession.

But, time will tell. Samsung and Apple ‘could’ be the only companies affected… but I doubt it!

I’m planning to watch this very carefully. If you’d like to watch along with me feel free to sign up for a 30 day trial and join me in the Options Chatroom 5 days a week HERE.

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