The Hustle

Volatile schmolatile: Stocks are rising, despite less than great earnings

The S&P 500 is up roughly 5% this quarter, despite fewer companies beating Wall Street expectations than in recent quarters.

February 7, 2019

A trade war, higher interest rates, and a puttering global economy had Wall Street feelin’ understandably blue at the end of last year. 

But, with the Federal Reserve rethinking its plan to gouge interest rates, investors are realizing the cries of economic downturn last year may have been a lit-tle dramatic.

Now, the market seems to be back on its happy pills, with stocks rising much higher than anticipated this quarter — even though earnings still weren’t that great in Q4.

Time for a little market positivity

Per The New York Times, numerous companies like Wynn Resorts, Ford, and JPMorgan Chase all missed Wall Street forecasts — yet all of the companies saw their stock prices rise.

While better than expected, Snap’s earnings were still nothing to write home about, but on the bright side, its user number stopped disappearing — so, congrats! You get a 15% uptick!

General Electric reported one of its worst quarterly profits ever — analyst forecasts completely whiffing — yet, the company’s stock jumped the highest in nearly a decade.

It’s called a ‘relief rally’ 

A relief rally is when investors, fatigued of fear-mongering and safe plays, pivot to a positive focus on company earnings reports — no matter how mediocre  — because they know things could be so much worse.

This quarter, fewer companies beat Wall Street expectations than in recent quarters, yet the S&P 500 is up roughly 5%

Also, stocks have risen an average 1.1% for companies that have reported earnings — the largest post-earnings jump in a decade.

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