{"id":66514,"date":"2015-01-14T09:35:26","date_gmt":"2015-01-14T14:35:26","guid":{"rendered":"http:\/\/countingpips.com\/?p=66514"},"modified":"2015-01-14T09:35:26","modified_gmt":"2015-01-14T14:35:26","slug":"trading-us-earnings-season-in-volatile-markets","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2015\/01\/trading-us-earnings-season-in-volatile-markets\/","title":{"rendered":"Trading US Earnings Season in Volatile Markets"},"content":{"rendered":"
January 14, 2015<\/div>
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Earnings season kicks off in the US this week and here\u2019s a preview of Alibaba, Citigroup and Exxon Mobil; three stocks you may want to look at ahead of their earnings announcement.<\/em><\/div>\n
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By SaxoMarkets<\/strong><\/a><\/div>\n
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\u200b\u200b\u200b\u200b\u200b\u200bUS earnings season\u00a0got off to a\u00a0strong\u00a0start on Monday\u00a0with\u00a0Alcoa Inc.\u00a0(AA:xnys) reporting\u00a0fourth-quarter earnings of $0.33\u00a0a share on revenue of $6.4 billion. The aluminium producer\u00a0beat\u00a0the $0.27 a share forecast by\u00a0analysts in a Bloomberg survey,\u00a0sending shares in the\u00a0company higher during\u00a0extended trading.<\/p>\n

The first US earnings season of 2015 comes at an interesting time for global financial markets. Concerns regarding the oil price and increased speculation as to when the Federal Reserve will take decisive monetary policy action are currently dominating headlines in the US.<\/p>\n

It is important to note that the declining oil price has had a large impact on estimates this time round. Over the last few months, total earnings growth across the S&P 500 has been falling, partly due t\u200bo energy sector companies slashing their earnings estimates.<\/p>\n

Nevertheless, US earnings season presents stock, CFD and stock option traders with an array of choices, even in these volatile times. Earnings releases from large companies and sectors can have a big influence on the performance of entire indices. Here\u00a0is a brief look at three\u00a0stocks and what the market may expect from their earnings release.<\/p>\n

1)\u00a0Citigroup Inc. (15\/01)<\/strong><\/p>\n

Citigroup Inc. (C:xnys) has endured a difficult end to 2014. At its last earnings release on 7th October, the banking giant was forced to restate its earnings to account for additional legal fees for the quarter. Nevertheless, a 13% rise in income, compared to the third quarter of 2013, saw its share price rise by 3.15%, as the bank announced a shift in strategy that would lead it to cut its operating footprint from 35 to 24 countries.\u00a0The move took markets by surprise and was\u00a0seen\u00a0as one of the first\u00a0announcements\u00a0to\u00a0trigger\u00a0a rally in stocks\u00a0that earnings season.<\/p>

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The bank has moved\u00a0in line with US equities on the whole over the last month; although\u00a0it may need an improvement on the $1.081 earnings per share\u00a0(EPS), forecast by analysts in a Bloomberg<\/em>survey,\u00a0to keep its share price above the $50\u00a0level. It hovers just around there now.<\/p>\n

2)\u00a0Exxon Mobil Corp. (02\/02)<\/strong><\/p>\n

Major energy companies like Exxon Mobil Corp (XOM:xnas) have borne the brunt of the recent slump in oil prices. At the beginning of October last year, WTI Crude Oil futures were trading above $90. After OPEC’s decision in November\u00a0not to reduce output, WTI Crude Oil futures have fallen to below $50. This also had a significant impact on companies such as Exxon Mobil and\u00a0Chevron Corp. (CVX:xnas).<\/p>\n

It is important to remember that the estimated EPS for the last quarter of 2014, forecast by analysts in a Bloomberg <\/em>survey,\u00a0has already been revised down. The market has thus perhaps already priced in a weak quarter for the company, pushing the share price from above $94 before Christmas to below $90 in January. This may be a difficult stock to trade, one may have to consider the\u00a0company’s long-term outlook\u00a0should the oil price remain low.<\/p>\n

3)\u00a0Alibaba Group Holding Ltd. (13\/02)<\/strong>\u00a0\u200b<\/p>\n

Alibaba (BABA:xnys), the Chinese internet giant which is part-owned by Yahoo! Inc. (YHOO:xnas), underwent the largest IPO in stock market history on 18th\u00a0September of last year. After a long auction period before the opening of the NYSE that day, the stock uncrossed to open far above $99. This retail powerhouse is trading at approximately $110\u00a0at the start of this year.<\/p>\n

Around 90% of the company’s revenue is generated in China. As a result, the share price has endured a bumpy ride at times amid fears over Chinese economic growth. Surprise rate cuts introduced by China’s central bank on 23rd\u00a0November of last year may not be enough to reach the central bank’s target growth\u00a0of 7.5%. This does not necessarily mean that Alibaba will report a lower EPS than the $4.642 predicted by analysts in a survey by Bloomberg<\/em>.<\/p>\n

On ‘Singles’ Day’ in China, the company’s sales surpassed the $5.9 billion in revenue generated\u00a0during 2013 with a record day of over $8 billion in sales. This was an extraordinary day\u00a0for the company and despite the economic slowdown in China, the company is still extremely profitable. Alibaba’s earnings report due out on 13th\u00a0February, one day prior to Valentine’s Day, will tell\u00a0investors just how\u00a0profitable it is.<\/p>\n

Earnings season may throw up more surprises, both to the upside and downside, than it has done previously because of the volatility of the global economy in the last quarter of 2014.\u200b<\/p>\n

About the Author:<\/strong><\/em><\/p>\n

\u200b<\/a>Article by\u00a0SaxoMarkets<\/strong><\/a><\/p>\n

Original Article:\u00a0http:\/\/uk.saxomarkets.com\/trading\/markets\/trading-us-earnings-season-in-volatile-markets<\/a><\/p>\n

Disclaimer<\/strong><\/span>:<\/strong>\u00a0This material should be considered as a marketing communication under the Financial Conduct Authority\u2019s rules. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, nor is it subject to any prohibition on dealing ahead of the dissemination of investment research. Saxo Capital Markets UK Limited (\u201cSCML\u201d) undertakes reasonable efforts to ensure that any information published in this communication is reliable. SCML makes no representation or warranty, or assumes no liability, for the accuracy or completeness of any information contained in in this communication.<\/span><\/div>\n
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SCML provides an execution only service and this communication does not take into account any particular recipient’s investment objectives, special investment goals, financial situation, and special needs and demands and nothing herein is intended as a recommendation for any recipient to invest or divest in a particular manner and SCML assumes no liability for any recipient sustaining a loss from trading in accordance with a perceived recommendation.<\/span><\/div>\n
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Saxo Capital Markets UK Limited is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871<\/span><\/div>\n
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Earnings season kicks off in the US this week and here\u2019s a preview of Alibaba, Citigroup and Exxon Mobil; three stocks you may want to look at ahead of their earnings announcement. By SaxoMarkets \u200b\u200b\u200b\u200b\u200b\u200bUS earnings season\u00a0got off to a\u00a0strong\u00a0start on Monday\u00a0with\u00a0Alcoa Inc.\u00a0(AA:xnys) reporting\u00a0fourth-quarter earnings of $0.33\u00a0a share on revenue of $6.4 billion. The aluminium […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-66514","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/66514","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=66514"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/66514\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=66514"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=66514"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=66514"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}