Losses during earnings season

This corporate earnings season, gaining momentum this week, has so far caused more worries and disappointments than pleasant surprises. Judging by market dynamics, investors are getting rid of shares of pandemic favourites. However, we can’t say yet that they are ready to massively add value stocks to their portfolios, though the latter are falling much less than the former.

So far, this is the worst January in 14 years.

Shares of Peloton collapsed 24% Thursday on reports that the company is suspending production of exercise bikes and treadmills because of scarce demand. With the latest momentum of the decline, the stock was near the mark where it traded just after its September 2019 offering and about 85% below the peak levels it reached a year ago.

Despite having 20 times bigger capitalization, Netflix hasn’t been left out of the strong moves. Its shares lost 20% in the post-market after its earnings release. The company continues to grow, but investors punished it for lowering its growth rate forecasts despite revenue and earnings above expectations last quarter. But the market now values it at June 2020 levels.

Earlier in the week, Goldman Sachs lost 10% in a day after disappointing investor reports. Since then, stocks have continued to cruise near their lows since May 2021.

Next week, Apple is due to report, but it has already lost 10% from the historic highs reached on the first day of trading this year.

The FxPro Analyst Team