It’s Monday, and we’re still in the middle of earnings season.
But this year, investors are being blindsided with lots of twists and surprises.
Which is why today, I’m going to talk about how to trade the market this week.
Year-over-year earnings growth was expected to be 26% this quarter – a strong number in any environment, not to mention a year-long pandemic.
However, there’s a big catch this time around: valuations.
Companies with high valuations are getting punched down after their earnings reports, even when they’ve posted strong results. We talk about “sell-the-news” situations a lot here, and this quarter has turned into the textbook example.
Of course, there are a few exceptions – in fact, my bullish trade list for today has a few of them -but in general, the market has become intolerant of high valuations, especially in the technology sector.
