according to materials from the site - By Cryptopolitan_News

The earnings season for the second quarter is in full swing, and companies from various sectors are publishing data that, in theory, should revive the market.

But investors are clearly not impressed. Despite impressive results in the banking sector, technology, consumer goods, and the tourism sector, the stock market is hardly reacting, and in many cases punishes everything that is not perfect.

All of this is happening against a backdrop of the S&P 500 index being near record highs, closing on Friday after setting seven new all-time highs in just fifteen trading days. According to Bloomberg, company valuations are sky-high, and the market has already absorbed much of the optimism.

One of the loudest examples is the financial sector. Goldman Sachs reported the largest trading revenue in the history of Wall Street. Morgan Stanley exceeded expectations for net revenue. JPMorgan Chase had its best second quarter in trading history, with trading volume in fixed-income instruments surpassing expectations.

None of this mattered. Goldman shares hardly changed. Morgan Stanley closed down 1.3%. JPMorgan fell 0.7%. Bloomberg Intelligence analysts Gina Martin Adams and Michael Kasper noted: "The financial sector exceeded earnings expectations for the second quarter, showing a result 94.4% above expectations, however, the stock reaction was muted as investors largely anticipated the results."

Wall Street ignores those who outperformed others and punishes those who missed the mark.
Such a cold attitude was also observed in other sectors. Netflix exceeded all key metrics, but by the end of Friday still lost over 5%. United Airlines optimistically assessed the growth in demand for air travel, but again, no growth. Investors are not expecting anything good. They need exceptional, unexpected, and forward-looking events.

"At the current stock valuation, all good news is already priced in," said Greg Taylor, director of investments at PenderFund Capital Management.

And if a company stumbles? The market does not spare. The gap in how investors treat misses and beat expectations is the largest in nearly three years, according to Bloomberg Intelligence data. "The margin for error here is small," said Michael Arone, chief investment strategist at State Street Investment Management. "When valuations are high, and you miss, the punishment is harsher."

Even companies that have achieved both profit and revenue receive lackluster applause. The only real winners this quarter in terms of stock value were PepsiCo and Delta Air Lines, which had lagged behind the market before releasing their reports. Their higher-than-expected results ultimately propelled their stocks upward. Most others fared less well.

There is also no particular optimism regarding the overall dynamics of the stock market. "At the index level, good earnings are unlikely to be the market catalyst that investors are waiting for," noted Julian Emanuel, chief equity and quantitative strategist at Evercore ISI.

Consumer spending supports results but does not inspire traders.
Consumer demand remains strong across all sectors, which is likely the only reason profits haven't fallen. But this also does not excite investors. Mark Malek, director of investments at Siebert, noted:

"Banks can only be healthy in a strong economy. Therefore, their profits and comments serve as a broader indicator of economic well-being."

This indicator still looks solid. Companies from PepsiCo to Levi Strauss, Delta, and Netflix have demonstrated demand. Even in the face of high inflation and tight interest rates, people continue to spend.

Data released on Thursday confirmed this. The Department of Commerce reported a 0.6% increase in retail purchases last month. This came after two months of continuous decline and exceeded nearly all forecasts surveyed by Bloomberg.

However, calm does not mean that investors are not nervous. The earnings report calendar for next week is filled with major companies such as Alphabet, Tesla, Honeywell, Dow, Lockheed Martin, Northrop Grumman, and General Motors. Expectations are already sky-high, and the risk of being punished for something less impressive is growing.

The situation is exacerbated by the fact that analysts have already lowered forecasts even before the quarter began. In January, the growth of the S&P 500 index was projected at 9.5%. By Friday, that figure had fallen to 3.3%.

So here is the picture: excellent numbers, weak reactions, harsh penalties for missteps, and high expectations for the future. And as Trump's trade rules still cast a shadow, everyone is guessing who will be the next victim of tariffs.


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