Stocks Take A Breather Before Earnings Season Gets Underway

Profit from the Pros Stocks Take A Breather Before Earnings Season Gets Underway Stocks closed lower yesterday with the markets taking a breather after two weeks of big gains. Traders are still buzzing over last week's better than expected employment report. And optimism is still running high over a U.S.-China trade deal. But reports that the WH is readying $11 billion in tariffs against the European Union, after the World Trade Organization found that the E.U. has been subsidizing Airbus for that amount, weighed on stocks a bit. The $11 billion in tariffs is a far cry from the hundreds of billions of dollars in tariffs the U.S and China were imposing on each other. But it was a stark reminder that there are plenty of other trouble spots regarding trade with other countries. It was also a reminder that the trade deal with the U.S., Mexico, and Canada via the USMCA still needs to be ratified. Adding to the concern was the IMF's cut to global growth forecasts to the slowest pace in 10 years. The headline sounded much worse than it actually was as they only cut growth estimates from 3.5% to 3.3%. But it was the 3rd time they cut estimates in 6 months. Yet all that aside, the U.S. economy looks fantastic. And it truly is the envy of the world right now. The market looks pretty fantastic as well. Earnings season unofficially begins this week (it officially starts next week when Alcoa reports earnings after the market's close on Wednesday, April 17th), and that has historically been a great time for stocks. In fact, over the last 10 years since this bull market began, stocks have gone up on average of 2% during earnings season. And I'm expecting the same, if not more, this earnings season. As I've said before, we could be just one good piece of news away from stocks making new all-time highs. A U.S.-China trade deal is likely to send stocks soaring. But a solid earnings season could just as easily be the catalyst for an upside breakout as well. So be sure you're taking full advantage of this historic bull market. See you tomorrow, Kevin Matras Executive Vice President, Zacks Investment Research Sponsor [Just Released: 5 Stocks Set to Double]( Five Zacks experts each announce their single favorite stock with the best chance to gain +100% and more in the months ahead. For example, one is a fast-growing small-cap drone maker that is undercutting defense giants by carving out a unique niche. Today, you are invited to download the private Special Report that names these stocks and spotlights why their gain potential is so exceptional. [See Stocks Now >>]( Most Popular Articles from Zacks.com [5 Top Stocks With Robust Sales Growth Worth Betting on Now]( Using conventional strategies, based on key fundamentals to select stocks, is always a safe approach. 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