Earnings season matters again

Kelly Evans's afternoon commentary & top market stories

VIEW IN BROWSER | SUBSCRIBE FRI, JUL 31, 2020 YOUR AFTERNOON NEWS UPDATE AND MARKET ACTION FROM CNBC AS OF FRI, JUL 31, 2020 • 11:31 ET DJIA 26232.84 -0.31% -80.81 S&P 500 3248.26 +0.06% +2.04 NASDAQ 10672.19 +0.80% +84.38 EDITOR'S NOTE Remember all those debates over getting rid of quarterly guidance--and even quarterly results?    This earnings season is a reminder that they do offer useful information to investors.    Have you seen shares of Pinterest today?? They're up 30%! This after their earnings this morning showed active users surged nearly 40% in the second quarter from a year earlier.    Yesterday, At Home surged 45% after blowing past earnings expectations, and even staid old UPS saw its shares surge 14%--the most since 1999--after a stronger-than-expected report. Qualcomm was up a similar amount for the same reason. Crocs had a huge session. The list goes on.    Even Big Tech is in on the action today, with shares of Facebook up more than 8%, Apple--which is also splitting its stock again--up more than 6%, and Amazon up more than 4% after surprisingly strong results last night. (Google is the rare exception, with shares slumping 4%).    I asked the Crocs CEO why analysts were caught so off-guard by their strong results, and he said "well, we didn't guide this quarter--no companies could really guide this quarter," because of the pandemic, so the street was left groping around in the dark.    For the most part, analysts have been too pessimistic--in tech's case, way too pessimistic. Eighty percent of companies so far (we're halfway through earnings season) have beaten estimates, according to Bob Pisani. That's about 10 points higher than usual. And the average beat is a whopping 13%, compared with the 3% norm.    Now, it may well be the case, as the Business Roundtable has argued, that quarterly guidance makes corporate America too short-term focused. The practice may yet fade away.    But this quarter is a reminder of just how much investors still rely on companies to tell them how business is going. While it's much more exciting to cover these wild stock swings we're seeing as a result, I'm not convinced that, going forward, less is more.    See you at 1 p.m!   Kelly   Kelly Evans Twitter: @KellyCNBC Instagram: @realkellyevans KEY STORIES  Stocks making the biggest moves in the premarket: Caterpillar, Merck, Chevron, Under Armour & more The stocks making the biggest moves in premarket trading include Caterpillar, Merck, Chevron, Under Armour, and more. U.S. agrees to pay Sanofi and GSK $2.1 billion for 100 million doses of coronavirus vaccine The agreement with Sanofi and GlaxoSmithKelin is the government's second in less than two weeks for 100 million doses of vaccine. Tech competitors are 'blown away' by Congress' CEO grilling and hopeful for antitrust reform Competitors who have complained about Big Tech said this week's hearing succeeded in showing something is wrong in monopolistic digital markets. Warren Buffett adds to his Bank of America buying spree, bringing stake to 11.8% Warren Buffett's Berkshire Hathaway this week again added to his already-enormous stake in Bank of America. Euro zone GDP plunged by a record 12.1% in the second quarter The euro zone economy contracted by 12.1% in the second quarter of 2020, compared to the first three months of the year, according to preliminary data from the region's statistics office. Exxon shares fall after it loses money for a second straight quarter Exxon said it lost $1.1 billion in the second quarter. CDC warns Congress of 'significant public health consequences' if schools don't reopen in the fall The CDC's director told Congress that millions of children get nutritional and mental health services at schools. Cramer cheers Apple's stock split decision: 'Apple cares about the little guy' Early coronavirus drug trials tested vaccines mostly on White people; next phase aims for diversity The first large-scale efficacy trials of potential Covid-19 vaccines began Monday in the U.S. A key priority is recruiting participants of diverse backgrounds. It may be a challenge. Chinese Tesla rival Xpeng Motors in talks over $300 million in funding ahead of U.S. IPO, sources say Xpeng Motors, one of Tesla's rivals in China, is in talks to raise around $300 million in funding ahead of an initial public offering (IPO) in the U.S., two sources familiar with the matter told CNBC.     IN CASE YOU MISSED IT Crocs CEO on earnings beat: Pandemic giveback campaign drove a lot traffic Las Vegas Sands president on maintaining employee pay though October Sen. Klobuchar: $600 unemployment benefit should stay   Unsubscribe Manage Newsletters Terms of Service Join the CNBC Panel Digital Products Feedback Privacy Policy   © 2020 CNBC LLC. All rights reserved. A property of NBCUniversal. 900 Sylvan Avenue, Englewood Cliffs, NJ 07632 Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes and Market Data and Analysis. Data also provided by THOMSON REUTERS