Economic indicators such as inflation, unemployment, GDP and others help to understand the dynamics and the current state of each country’s economy. Similarly, there are indicators to understand the performance of public companies and their respective stock in the market. One major indicator of such kind is an earnings report.
An earnings report is a central tool to assess the operational success of a company and shows what revenue it made over a given period (normally, 3 months, but larger timeframes are also given within the regular corporate reports). This figure is then divided by the number of shares in circulation so that investors can see Earnings Per Share resulting from the revenue.
In relation to the stock price, every earnings report release affects the market much the same way any economic indicator release does to a currency. If the actual figure disappoints investors, the price goes down; if it brings a pleasant surprise exceeding the expectations, it supports the stock price.
For example, the most recent earnings report of JP Morgan was released on October 15.
Source: www.investing.com
As you can see, the figures were slightly better than what the observers estimated. As a result, the stock price rose significantly on the day of the release: on the H1, you may see it jump from the area of $118 to $121 per share.
Although it went into a correction later, the release gave it a short-term boost, which you can use if you want to trade the news. More importantly, the positive report solidified the rising trend, which means it would be likely to go on unless there was some major negative corporate news distorting the picture. As expected, on the H4, the uptrend did not see much change until just recently.
Below, you will find the calendar of earnings reports due this week from the banks whose stocks are traded in MT5 provided by FBS. All of these were analyzed previously and present interesting investing and trade opportunities for any trader who wants to diversify the portfolio.
Source: www.investing.com
Hence, Citigroup and JP Morgan will release their reports on Tuesday, while the Bank of America will do it on Wednesday. All the reports will be out at 13.45 MT time - that's when the market movement is expected to start on the news.
Within the educational materials made available by FBS, you may find an article specifically dedicated to trading the earnings reports – you are welcome to read it and make it work for you!
We will keep you updated with the trade opportunities and the way to use them most effectively.
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