Calm Before the Storm: Earnings Season Set To Begin


The news cycle has been quite complimentary towards the lack of stock market volatility recently. But that could be set to end as soon as this afternoon.

After the closing bell, second-quarter earnings season kicks off with the release of data from Alcoa, a top aluminum producer and traditionally the first major company to disclose its figures in a given quarter.

The Alcoa release will signal the start to a period of time—several weeks, traditionally—in which companies reveal their second-quarter prowess to stockholders and other investors. There are four earnings seasons each year, typically occurring 1-2 weeks after the close of each quarter. While earnings season has no official end date, it is generally considered to be concluded once most major companies have released earnings.

So if earnings season reports happen several times annually, why is today so significant? The current bull market has been marked by consistency—a sustained, strong climb to all-time highs in the market. Today, experts are using terms like ‘corresponding violent reaction’ and ‘bombarded with information.’

Some of the reports are bound to be positive, while others may dampen moods on Wall Street. Whatever the results, expect to see some sudden jolts in prices in the coming weeks as analysts discuss whether earnings met, exceeded or fell short of their expectations. Shares of companies regularly jump—or fall—by 20% or more during earnings season.

So whether the news this afternoon and in the coming days is good or bad, it’s time to say goodbye to the quiet summer days on the market.


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