Earnings season is the heartbeat of the market - and every day brings fresh signals about where money is flowing.
With each report, we learn not just how companies are performing, but how investors are reacting.
In the Daily Beat, we spotlight the most important earnings moves from the prior session - the winners, the losers, and the reactions that reveal what really matters to the market right now.
Whether itβs a bellwether with broad economic implications or a niche name making waves, we cut through the noise to focus on the setups that matter most.
Here are the latest earnings stats from the S&P 500 π
*Click the image to enlarge it
The only S&P 500 earnings reaction on Wednesday came from the $26B packaged foods giant, General Mills $GIS, which had a -0.36 reaction score after posting better-than-expected headline results.
Revenues met the market's expectations of $4.52, and earnings per share came in four cents above expectations of $0.82.
Now let's dive into the fundamentals and technicals π
GIS had its 4th consecutive negative earnings reaction π»
General Mills had a slightly negative post-earnings reaction, and here's what happened:
Net sales decreased 7% year-over-year, primarily due to the divestiture of the yogurt business. The decline in organic net sales was significantly less pronounced.
Operating cash flow was $397M, down from $624M in the prior year.
In addition to the mixed quarter, the management team reaffirmed its weak forward guidance, which calls for EPS to decline by 10% to 15% over the next fiscal year.
Despite posting a double beat, shareholders were punished again by Mr. Market. This confirms the preceding negative and fundamental trends that have been in place for years.
The stock is in a nearly 50% drawdown in the middle of a raging bull market.
A major cause of the weakness is the GLP-1 boom, which has led many people to eat far less of the processed junk food that this company specializes in.
To mitigate this, the management team is developing new products with higher protein and fiber content. So far, they haven't been successful...
The price is now at a key level of interest, which marked the 2018 peak and 2020 lows. Will polarity save the stock, or are the bears about to attack again?
If and when GIS closes below 48 would mark the beginning of a fresh leg lower. Above that level, we expect sideways price action for the foreseeable future.
Stay safe out there
-The Beat Team
P.S. At All Star Charts, Ricardo Sarraf is crushing it from the short side, and some of the best trades have come from names like GIS.
For many investors with portfolios full of long exposure, his bearish trade ideas offer a tremendous hedge.
In ASC's latest Short Report, Rick outlined one of the largest discount store names in the U.S.
