Monday, April 11, 2011

JPMorgan (JPM) (BAC) (GOOG) Reporting Later This Week, What's in Store

The large number of negative catalysts has thrown the entire earnings season into turmoil, as JPMorgan (JPM), Bank of America (BAC) and Google(GOOG) prepare to report later this week, while Alcoa (NYSE:AA) reports after the market closes today.

What has happened is it isn't going to matter what the numbers are going to end up being for the last quarter, as the game has completely changed since it ended.

Exceptions to that general rule could be companies that underperform in the last quarter and still give out weak guidance. But other than that, even a strong quarter isn't going to matter much, as every shareholder and investor wants to focus on one thing alone, and that is guidance.

Positive surprises for the latest quarter, coupled with solid guidance for the following quarter, will continue to be important, but companies will have to do more than assert those possibilities and convince investors they have something to back up any positive outlook with.

Without that, it appears it will be hard to believe what a company says. In other words, everyone is a skeptic now, and they better be, as a collapsing U.S. dollar, pullback in China, sovereign debt crisis in Europe, unrest in the Middle East, deepening inflation, and the consequences of the Japanese earthquake are just some of the negative factors hitting the markets, and we still have far too many investors acting as if it's business as usual.

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