During the busiest week of second quarter earnings, one of the week’s most anticipated reports is due out on Thursday — and that is results from online retail giant Amazon (AMZN).
Amazon is expected to report results after the market close on Thursday, with analysts looking for the company to report earnings per share $1.42 on revenue of $37.2 billion, according to estimates from Bloomberg.
Also on the earnings calendar on Thursday will be Starbucks (SBUX), MasterCard (MA), UPS (UPS), Altria (MO), MGM Resorts (MGM), Procter & Gamble (PG), and Yahoo Finance parent company Verizon (VZ).
The economic calendar will be busy, though no major market-moving reports are expected to be released. Reports on Thursday are expected to include the weekly reading on initial jobless claims and the June numbers of durable goods orders.
Investors will also keep an eye on shares of Facebook (FB), which initially dropped but then rallied in after hours trade on Wednesday after reporting earnings and revenue that topped estimates.
Bulls and (sort of) bears
Jeremy Siegel, the “Wizard of Wharton” known for being a long-term bull on the stock market, said Wednesday that if the U.S. corporate tax rate is taken down to 20% from its current 35% we could see stocks rally another 10% this year.
For long-time followers of Siegel’s market calls, this is not a surprise.
Siegel added in an appearance on CNBC that we haven’t seen the kind of euphoria that usually signals that the end of a bull run is near. “I see a lot of cash on the sidelines that could come in later,” Siegel said. “Stocks are still the place to be.”
Meanwhile, Oaktree Capital’s Howard Marks was far more cautious in his latest investing memo circulated Wednesday.
“Since we never know when risky behavior will bring on a market correction, I’m going to issue a warning today rather than wait until one is upon us,” Marks wrote.
And while Marks — whose investment insights are among the most widely-read missives on Wall Street — said in his note that “some of the usual ingredients” of a market mania are missing from the environment today. Among them are broad investor awareness of the risks that are out there, the recognition that future return prospects look modest at best, and an acknowledgement that things won’t be great forever.
But if there is a place in the market today where investors have looked past any fears and decided that things are good, and will remain so, it is in big-cap tech stocks.
Known as the FAANGs — Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Google parent-company Alphabet (GOOGL) — these stocks have been powering the market higher this year.
Investors also view this companies, which are the drivers of our modern economy, and almost completely insulated from competition and perfecting their business models in the industries they’ve come to dominate.
This, of course, is a familiar story that investors have told themselves about companies.
“Many of the most important considerations in investing are counterintuitive,” Marks writes.
“One of those is the ability to understand that no market, niche or group is likely to outperform the others forever. Given human nature, ‘the best’ will always come eventually to be overpriced, even for their stellar fundamentals.”
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Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland
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