How to Survive the War on Earnings

It's a war out there. If you aren't careful, wild price swings will tear your portfolio to shreds. November 05, 2013     How to Survive the War on Earnings   The earnings war that wasn't… The (quiet) Q3 battle Plus: Tired of Twitter's IPO yet? Just wait…   Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner Your investments are in jeopardy. You've entered the heart of earnings season this week. It's a war out there. If you aren't careful, wild price swings will tear your portfolio to shreds. You know the routine. Every three months, investors scramble for their flak jackets as their favorite companies report numbers. Meanwhile, traders head for the exits as potential trend-breaking news approaches. But wait… The Battle of the Third Quarter has been quiet. Too quiet. Just a handful of casualties by my count. No carnage to be found. No major whipsaws (minus a few tech names). Here are the numbers from Bespoke Investment Group: As of yesterday afternoon, 1,444 companies have reported. But instead of the massive moves some pundits predicted, earnings reactions have been downright mundane. So far, the average stock has gained a measly 0.18% on its report day. "Earnings season can really be a rough time for the market," reads the Bespoke report. "But over the past year and a half, it hasn't made investors very scared at all." Here's where we stand right now: If the current trend holds through the end of this earnings season, will be the sixth consecutive quarter of earnings day gains for the average stock. That breaks the recent record of four consecutive quarters of gains from 2005. Smooth sailing for earnings means more ammo for the fourth quarter melt-up. With no big disappointments this week, I don't see too much standing in the way of additional broad market gains before the end of the year. We haven't seen the highs just yet…     Rude Numbers Targets, Predictions and Wild Guesses   $43.4 billion has been raised in initial public offerings in 2013. The previous high mark of $48.7 billion was set back in 2007... 2003 was the last time Blackberry shares traded in the $6.50 range. The troubled company fell by as much as 18% yesterday as a takeover bid by Fairfax Holdings fell through. $2.2 billion is what Johnson & Johnson will pay to end U.S. drug probes into the firm's alleged kickbacks to pharmacists. It's one of the largest health care fraud settlements in history. 1,757 is where you'll find S&P futures this morning. The broad market looks as if it's ready to cough up yesterday's gains today… 71% of all stocks trading on U.S. exchanges are above their respective 50-day moving averages…     Rude Trends When to Buy... When to Sell   Are you sick of all the Twitter chatter yet? In just a few days, the Twitter offering will dominate your news feed. The IPO is attracting all kinds of attention. Everyone wants a piece of the biggest social media darling to hit Wall Street since Facebook… "The social messenging service has taken a page from its big blue rival, jacking up its price range in the final days before its share debut on the New York Stock Exchange," Forbes reports. "The new range is $23 to $25 per share, up from $17 to $20 per share earlier." Of course, there are plenty of opinions regarding the fate of this social media IPO. Some are worried that Twitter stock will stumble out of the gate like its older brother, Facebook. Others are concerned with the valuation. I say don't bother with either… We'll know soon enough whether Twitter stock will soar or stumble out of the gate. Only supply and demand will give us the answer. For now, the smart move is to watch Twitter develop some price history instead of throwing market orders at the stock as soon as trading begins. [Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner] Flying High with Airline Stocks         Ignore At Your Own Peril Today's Must Read Links   Breakthrough Fuel That Makes Oil Drilling Obsolete 2 Words Obama Doesn't Want You to Know Have you seen any of these coins lately?     BE SURE TO ADD dr@dailyreckoning.com to your address book.       Additional Articles & Commentary: Join the conversation! Follow us on social media:         To end The Daily Reckoning's Rude Awakening e-mail subscription and associated external offers sent from The Daily Reckoning and The Rude Awakening, click here. Please Note: If you unsubscribe from The Rude Awakening, you will also be unsubscribed from The Daily Reckoning. The Daily Reckoning's Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. 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