Earnings Season

Welcome back to another Economic Track with Zac. Today’s edition focuses on earnings season. Most companies have released or will soon release their Q2 earnings, and the market has been volatile in response. Three companies to focus on with respect to Econ Wealth’s portfolio are Dropbox (DBX), American Axle & Manufacturing (AXL), and Under Armour inc. (UAA). The Investment Management Team realized gains in DBX ahead of its earnings report later today. In the past, Dropbox has fallen in the few days after earnings and in our opinion, the chart looks rather overextended potentially leading to a repeat sell-off after its next earnings report. Speaking to the increased volatility seen, AXL underwent a quick price increase after its above-consensus earnings report. A rise of around 9% was effectively erased intraday from investors realizing gains (July 30, 2021). The Investment Management Team believes that there is further potential upside for AXL, especially longer term, with the tailwind of upgraded guidance. UAA is another company doing well since earnings, up around 11% after reporting earnings. All of this to suggest that, in our opinion, there is a lot of fear and greed in the market right now. The IMT is letting cooler heads prevail in these turbulent times making tactical trades and not following short-term trends.

Thanks for joining in to another Economic Track with Zac. Tune in next Wednesday for more updates.

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