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Earnings season: How companies have reported so far

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Yahoo Finance's Julie Hyman and Brian Sozzi discuss the top takeaways from earnings season so far and why Netflix shares are under pressure yet again.

Video Transcript

[MUSIC PLAYING]

JULIE HYMAN: Well, the selling that we've seen in the markets has coincided with the beginning of earnings season. Coincidence or not? Brian Sozzi, I suspect not.

BRIAN SOZZI: No, this earnings season, Julie, is shaping up pee-ew. Just really stinky across the board. 64 S&P 500 companies have reported thus far. And Goldman Sachs' chief US equity strategist David Kostin noting only six companies in the S&P 500 have even stepped up to provide formal guidance for the first quarter. Really goes a long way to showing how just terrified executives are in this environment of the pandemic, inflation, worker shortages, you name it.

Kostin also noting five of the six companies have guided below consensus earnings estimates for the first quarter, including three companies that actually came out and beat on their fourth quarter estimates. The only beat and raise story-- and what does that mean? That means when a company beats on earnings and raises guidance for this current quarter. The only S&P 500 company that has done that so far is chip giant Micron.

And of course, we're still-- the market's still trying to figure out what to make of that Netflix quarter last week, Julie. Stock down 24% on Friday, seeing the weakness continue, and today come at a high multiple tech stock. Not a good environment to be in when the market is worried about these types of stocks.

But also look, Netflix showed a disappointing quarter in terms of quarter over quarter growth. And of course, their first quarter outlook disappointed many. And look, we're showing right now Netflix shares under pressure yet-- yet again down 6.5% so far in today's session.

JULIE HYMAN: So the question is now, with stocks having fallen so much, particularly tech stocks, is the set up now a teensy bit better going into earnings for some of the large cap tech because expectations are just down in the dumps? Although the flip side, Netflix was falling into its earnings report too. So you know, it's-- it's an all [? and ?] expectations game, of course. Our expectations [INAUDIBLE]

BRIAN SOZZI: Well, as you know, Julie, I don't make predictions on stocks. You know that. Predictions on other things. But I will say this-- don't fight-- you know, don't try to catch a falling knife. That's something I learned early on in my career as an analyst.

You know, if you want to try to step in here when you're seeing an entire market sentiment shift really negative and try to pick bottoms on tech earnings, and this week ahead of earnings from Tesla and Apple which might show in many respects the same things that Netflix showed last week, good luck with that. You don't want to-- in this market or in this type of market tape, I wouldn't be fighting that.

JULIE HYMAN: But as I always say, it depends upon your time horizon. If you're trying to buy now to get a quick pop on earnings, maybe not. If you're buying now--

BRIAN SOZZI: I can't [? feel ?] you out, Julie. You told me no predictions. I can't [INAUDIBLE] I can't.

JULIE HYMAN: It's not a prediction. It's just a counterpoint. That's all.

BRIAN SOZZI: All right.

JULIE HYMAN: That's what we do. Point, counterpoint.

BRIAN SOZZI: OK.

JULIE HYMAN: All right, here's a point and an important one today. We are seeing this sell off deepen. The S&P 500 is set to enter a correction that is 10% down from its recent high. Of course, the NASDAQ already got there. But the S&P now down almost 2%. The Dow is off 568 points right now. We continue to watch this selling, and we'll be right back.