Market Anticipation Builds as 3 Key Companies Prepare to Announce Earnings

Corporate America was bracing itself to report the biggest drop in earnings since the pandemic began three years ago, with profits for S&P 500 companies expected to fall by as much as 8% due to inflation, increased borrowing costs, and other headwinds.

However, businesses appear to be blowing past these low expectations, with 77% of reports beating analysts' estimates, with reported earnings being 7.2% above expectations.

A relatively weak dollar due to the trend of de-dollarization gaining momentum and the looming crisis over raising the debt ceiling due to political differences regarding government expenditure on both sides of the aisle might also have been unwitting tailwinds that have helped the likes of Apple Inc. (AAPL) keep the mood buoyant on the Street

After reporting stronger-than-expected results, the tech giant’s shares surged by 4.8% on May 5.

However, the first quarter still would mark a second straight quarterly fall for U.S. corporate earnings after COVID-19 hit corporate results in 2020.
Given this backdrop, let’s look at the prospects of three stocks ahead of their earnings release this week.

The Walt Disney Company (DIS)

DIS has recently been in the news for being on a legal collision course with Florida Governor Ron DeSanctis. Differences between the company and the governor began with DIS’ opposition to the Parental Rights in Education Act, which prohibits lessons on sexual orientation and gender identity in public schools through the third grade.

In an alleged retaliation, the Florida Senate approved the Disney Special Tax-District Bill, which would seek to move the control of the Reedy Creek district from the company back to the state. DIS has expanded the lawsuit contesting this move to include new regulations passed by the state’s legislature that allow officials to nullify development agreements brokered by the company. Continue reading "Market Anticipation Builds as 3 Key Companies Prepare to Announce Earnings"