The Weekend Rip: Earnings Are Here, What Does That Mean?

The Weekend Rip 4/19

Good evening everybody. The week ahead will be filled with more of the same lunacy we are all now growing accustomed to. We’ll all remain mostly isolated, stocks will ricochet like ping pong balls, there will be COVID reports that inspire hope and others that spur fear, the president will tweet things, etc etc…

And on top of this mess that’s become the new normal, we’ll get a full rack of smoked earnings. Netflix, American Express, Verizon, IBM, Snapchat, Truist, SAP, Intel, Dominos and many more will step up.. See below for the schedule of big names reporting.

We just want to reiterate two things we covered last week on separate occasions and put them together.

1. In Zweig’s interview with Charlie Munger, a guy who is definitely wiser than us and likely wiser than you, Munger states that he has no idea how this will all pan out. So, humility, which is always warranted in markets, is even more warranted here.

And 2. The earnings numbers reported themselves will not mean a hill of beans. It will be the body language that will be much more important. Do corporate leaders sound like they have a plan? Do they have their shirt together? It will probably be a great quarter to listen to the earnings conference calls and a poor one to attend to earnings numbers.

Here’s the weekly performance for the major indices and the weekly S&P 500 chart:

S&P 500	2,874	+3.04%
Nasdaq	8,650	+6.09%
Russell 2000	1,229	-1.41%
Dow Jones	24,242	+2.21%

Weekly percent changes

$IWM Weak AF

Is the underperformance in the Russell 2K something or nothing?

Here’s the Russell 2K ETF, $IWM relative to the Nasdaq 100 ETF, $QQQ, for the last 5 years.

And the same for $IWM relative to $SPY.

Small caps are getting decimated. The real question here is whether this is a secular or cyclical shift. Place your bets…

Tomorrow is 4/20. Weed Stocks Still 💨

Here’s the YTD performance of some popular cannabis names. All of them are atrocious. If you’ve been long here, well at least you can self-medicate. Perhaps 4/20 can give them a buzz?