An epic stock market rally faces a key test in the coming weeks as investors learn what executives expect to make profits and income in the coming periods.
The fourth-quarter profit season really kicked off Friday with better-than-expected profits from some of the country’s largest banks. Despite a quarterly profit record at JPMorgan Chase & Co. and some bright spots at Citigroup Inc. and Wells Fargo & Co., shares of all three declined, with Wells and Citi falling more than 6%.
The market reaction highlights the bets as large companies begin to share quarterly results and, most importantly, their prospects for the coming quarters. While the results were not terrible, the shares were hit hard, reflecting rising investor expectations as bank shares rose more than 10% by 2021 towards trading in the stock market. Friday.
The rise in major indices to new highs this year, despite the acceleration of the coronavirus toll and questions about how this will affect the economic outlook, underscores pressure on major business executives to explain how they expect results to improve. 2021. earnings during the 70% S&P increase from last March’s intraday low have been considered acceptable by investors because many expect a sharp rebound this year. Companies whose projections are short can expect to be punished, they say.
“Whether they had a good quarter or not, it’s all what’s to come,” said Kimberly Woody, senior portfolio manager at Globalt Investments, which manages $ 1.9 billion. “The good news for the future has come at a price in this market.”