The financial results season on Wall Street has started

Profit taking on technology companies on Monday strongly undercut the wings of the stock market bulls on Wall Street. However, whether the correction on those indices will be continued will be decided by the starting season of results in the USA. Your fear of a pandemic will also make you worse.

Financial results on Wall Street

Monday brought a strong mood swing on Wall Street. Especially among technology companies, where the initial strong increases, due to the realization of profits on acacias Tesla, Microsoft, Facebook, Alphabet and Apple Lossless Audio CODEC (ALAC),, ended with big drops. As a result, the index Nasdaq Composite, which in the first hours of trading climbed to 10824,78 points, rising by 1,95 percent. and setting new historical records, ended the session with a decline of 2,13 percent. up to 10390,84 points

The sell-off of technology companies also pulled down on Monday S & 500 index. He ended the session with a decline of 0,94 percent. to 3155,22 points, previously rising to 3235,32 points and then making a return from the June maximum (3233,13 points).

Whether or not Monday profit taking will be continued in the following days, as the technical analysis indicates, will now depend on two factors. The main season will be the season just starting.

Records for the next days

Today, before the Wall Street session, the financial reports for the second quarter of 2020 will be published by Citigroup, JPMorgan Chase and Wells Fargo. On Wednesday, among others, Goldman Sachs, BoNY Mellon and US Bancorp. On Thursday, Bank of America, Johnson & Johnson and Netflix.

If, in the case of banks, we were suggested by the yesterday's good behavior of the financial sector, which, apart from health care companies, ended the session in a positive way, one should expect a positive reception of quarterly results. However, it must be remembered that for most companies it will not be a successful season. According to market forecasts, companies included in the S & P500 index recorded in the second quarter of this year drop in earnings per share (EPS) by as much as 42,7 percent. Every year. The improvement is expected to take place in the following quarters, but only in 2021 the annual profit dynamics is to start growing. According to market forecasts, in the third quarter the profits of American companies are to drop by 24,9 percent, and in the fourth quarter by 13,1 percent. and only in 2021, profits will start to grow, to increase by 30,9 percent throughout the next year. And now the question is whether this is a strong collapse in profits in the second quarter of this year. is already fully discounted by Wall Street?

The Wall Street results season will be one of the factors investors will pay attention to in the next 2-3 weeks. The second should be reports on the coronavirus epidemic in the USA. Especially now, just after California decided to close again, among others restaurants, gyms, cinemas and churches. California is the richest American state that is responsible for producing 15 percent. American GDP, and if it was excluded from the US, it would be the 5th largest economy in the world.