U.S. markets and stock ETFs recovered from an early morning stumble last week as traders looked to a strong earnings season to keep the rally going.
Sold results out of Apple (NasdaqGS: AAPL), General Electric (NYSE: GE) and McDonald’s (NYSE: MCD) helped lift U.S. benchmarks higher.
“The U.S. market is attempting to accommodate a series of tragic natural disasters overseas as well as the coronavirus outbreak in China,” Jefferies analysts wrote in a note, according to Reuters. “The good news is that the breadth of earnings and TP (target price) revisions over the past month and quarter is surprisingly strong.”
The quarterly report also helped resolve an early-morning fall after economic data revealed pending home sales slipped in December across all regions of the U.S. and news of a spreading coronavirus, the Wall Street Journal reports.
“The focus is moving more to the fundamentals and that’s a good thing,” Larry Peruzzi, managing director of international equity trading at Mischler Financial, told the WSJ, referring to the string of healthy earnings.
Of the 143 S&P 500 companies that have reported earnings, about 70% have topped estimates so far. However, analysts anticipate earnings to be flat in the latest quarter, which is a slight improvement over a dip of 0.6% estimated at the start of the season, according to Refinitiv data.
U.S. markets have more or less recouped their early losses by mid-Wednesday ahead of the Federal Reserve’s policy meeting where policymakers are largely anticipated to hold interest rates steady. Market observers are waiting to see how the Fed gauges the economy and whether or not there will be additional rate cuts this year.
“There is not going to be any fireworks there,” Richard McGuire, head of rates strategy at Rabobank, told the WSJ. “He’s likely to reiterate his previous stance, which is that the current policy is appropriate.”
This article originally appeared on ETFTrends.com.