Third-quarter earnings season starts this week. Companies will report numbers from July, August, and September. The S&P 500 will either go up, down, or sideways based on information that every algo already priced in six weeks ago.
Financial journalists love earnings season. Gives them something to write about that sounds important. They get to use words like "blockbuster" and "propel" as if corporate America's ability to count its money three months late has predictive power. It doesn't.
Here's what happens every quarter. Companies beat estimates that were deliberately lowered. Analysts act surprised. Retail traders read headlines about "booming profits" and buy shares at all-time highs. Then they check their portfolios in November and wonder why they're down 8% despite the blockbuster f*cking profits.
The S&P 500 sits near record levels right now. Before the earnings. Which means the earnings are already in the price. This is not complex. If you're waiting for Q3 results to tell you whether to buy stocks in Q4, you're using a sundial to catch a flight.
Technical analysts don't care what the earnings say. We care where the 50-day moving average crosses the 200-day. We care about volume spikes and resistance levels. These things are equally meaningless, but at least we're honest about reading tea leaves instead of pretending that Apple's iPhone sales from September matter to what happens in October.
Booming profits could propel the market to new heights. Or they could do nothing. Or the market could tank because the profits weren't booming enough or were booming in the wrong way or boomed on a Tuesday when everyone wanted Thursday booms. The earnings don't matter because nothing matters except what price someone else will pay tomorrow, and that person isn't reading earnings reports either.
They're checking TikTok for stock tips from a teenager in Ohio.
Photo by Brecht Corbeel on Unsplash
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