TOGGLE Daily Brief: Earnings Season

TLDR: If leading indicators are correct, forward guidance will be rocky in the upcoming earnings season. And S&P 500 still trades at 17 P/E.

Watch out for forward guidance

TLDR: With leading indicators collapsing, forward guidance could rock markets this quarter.

The bulk of earnings releases for Q4’22 lies ahead of us and promises to be full of drama.

Last year ended on a positive note, with hopes of milder inflation and a pivoting Fed. However, investors will focus on forward guidance and that might prove ambivalent.

With growth and new orders collapsing across the U.S. and other major economies, this earnings season could be the reckoning moment when the market realizes 17x P/E on S&P 500 might be rich.

Also, remember that for consumers inflation seems far from peaking.

Status of the Leading Indicators

We’re restructuring the Leading Indicators section to include it on a daily basis, focusing on the most pivotal indicator for the day.

The TLI usually moves ahead of all other indicators, and it printed bearish during last week. As markets trace higher, we’re watching the Peak Probability Index head towards its threshold.

Idea Spotlight: Netflix (NFLX)

Seasonality is the study of the performance of a security during a certain period of the year. TOGGLE observed that Netflix exhibits positive seasonality over the next 1M horizon.

With its earnings around the corner, TOGGLE's latest WhatIF Earnings tool can help you understand how Netflix stock typically performs after an EPS beat or miss. Check it out below!