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Let the Earnings Begin...

Momentum Trader editor Dave Bartosiak called today’s market action “a wildly mediocre start to the week”. This yawn-inducing beginning was all the more ironic because we are gearing up for earnings season, which offered a few bank reports last week and continued with a strong performance after the bell today from Netflix (which is up more than 10% after hours on impressive subscriber growth). 

Nevertheless, by the closing bell, stocks had barely moved. The S&P was down by 0.01% on Monday to 2459.1 after spending much of the session slightly on the positive side. However, it managed to keep above 2450 and, therefore, seemingly in a holding pattern until earnings season can push it past 2500 (hopefully). The Dow was off by 0.04% to 21629.7. The NASDAQ just finished its seventh straight day on positive ground after flirting with a loss late in the session. It barely kept its streak going with a scant rise of 0.03% to 6314.4...but it still counts! 

You can feel the editors getting ready for earnings season. Surprise Trader, which started today with 0 stocks in the portfolio, added four to kick things off...and one of them was Netflix! Also several of their commentaries are focused on the importance of this season in sparking the market for the next leg higher. Check it all out in the highlights section below, which includes four swaps from Black Box Trader, investing in emerging technologies in Zacks Confidential, and how RTA is staying “locked and loaded” for 2500 and beyond. 

Today's Portfolio Highlights: 

Surprise Trader: Its earnings season...a.k.a. the busy season for ST! Eric kicked things off on Monday with four new buys in the portfolio. All of these new picks are Zacks Rank #2s (Buys), have a solid earnings history and are reporting this week. They are: 

• Union Pacific (UNP): is part of a space (Transportation-Rail) in the top 10% of the Zacks Industry Rank and has a positive Earnings ESP for the quarter being reported before the bell on July 20 (Thursday). 

• Netflix (NFLX) reports today! It hasn’t missed a quarterly estimate in five years and has an average beat of more than 100% in the past four. And of course, it has a positive Earnings ESP for today. 

• E*Trade (ETFC) is now forecasted to post solid growth for the full year, which marks a turnaround over the past 3 months. It reports again after the close on Thursday and has an average beat of 20% over the last four quarters. 

• Comerica (CMA) has an Earnings ESP of 4.7% for tomorrow’s report. It is part of a space (Banks – Major Regional) in the top 33% of the Zacks Industry Rank and has seen nothing but rising earnings estimates in the past two months. 

The editor adds each one of these to the portfolio with 12.5% allocations. Read the full write-up from a lot more specifics on these buys. 

Black Box Trader: Four swaps were made in this week's adjustment. The portfolio said goodbye to: 

• Cigna Corp. (CI, +2.5%)
• Eastman Chemical (EMN, +0.8%)
• Delek US Holdings (DK)
• XPO Logistics (XPO) 


The new buys that replaced these names are: 

• Delta Air Lines (DAL)
• Kemet Corp. (KEM)
• CarMax (KMX)
• Vishay Intertechnology (VSH) 


Read the Black Box Trader's Guide to learn more about this computer-driven service designed to take the emotion out of investing. 

Zacks Confidential: If there’s one area where ETFs make the most sense, it is with emerging tech trends. We all know that our minds will be blown by technological advances moving forward, but which specific companies will be successful in bringing them to the public? That’s what Steve wants Neena Mishra to focus on in this week’s Zacks Confidential. Learn about three technological trends that will reshape the world in the coming years and the best ways to profit by clicking: Invest in Top Tech Trends with these ETFs

Reitmeister Trading Alert: "Earnings continue to be the main focus this week. More and more bellwethers will report as we progress forward. By the end of next week there will be enough reports in hand for investors to place a grade on the state of corporate earnings.  

"'C' may be a passing grade, but likely keeps this market stuck in neutral. “B” or better is all that is required to progress to 2500 before the next consolidation period.  

Given the strength of economic reports this past quarter it would be hard to imagine a poor result for corporate earnings. That is why my portfolio is locked and loaded for the next leg higher." -- Steve Reitmeister 

All the Best,
Jim Giaquinto 


Before You Go... 

The latest Zacks Top 10 Stocks commentary was released on Friday. Sheraz Mian gives you an overview of the portfolio's first half performance, and then updates each of the picks individually. So if you missed this important update, make sure to click the link above.

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