Michele Schneider, Partner and Director of Trading Research and Education at MarketGauge.com, joined Cheddar News to discuss how the stock market is reacting to earnings season kicking off.

Stocks Open Mixed Thursday Following AT&T, Tesla Earnings 

now joining us now to discuss these markets in the early moments of training is Michelle Schneider, partner and director of training, research and education for market gauge dot com. Michelle welcome Q three earnings keep rolling in and for the most part we're seeing major companies continuing to report positive results. What do you make of the earnings so far? Are they in line with what you expected this season? Well, they're definitely a little better than what we expected in certain pockets. But then pretty much in line with others. Like for example, airline stocks that have done well, that's not a big surprise because if you go anywhere these days, you can see that the airlines are packed in fact, in some ways more packed than I've seen. Even pre Covid. Um, as far as the bank earnings. Again, no real big surprise because of the interest rate hikes that actually helps the banks in terms of deposits. Tesla's Miss, I don't think was as surprising some of it. Obviously the numbers weren't as bad, but just the whole buzz and what musk said had a lot to do with why I think the stock is down more than what really the numbers would suggest because if you look at some of the other car companies, obviously they don't compete with Tesla. But even if you look at things like Rivian or you look at ford and General Motors, they're down but not nearly as bad. So it's a mixed bag and exactly what you said at the beginning and that is possibly also because they're lagging indicators earnings. This is what already happened, looking at the numbers of what they're expecting to happen. Some people are still looking pretty good in terms of the future and their guidance while others we'll still, we'll see. I mean we still have some big ones coming up, right? Absolutely. You know, given what you said about Tesla and what you know, Elon musk had to say and given that also this twitter transaction seems to be a shadow kind of overhanging Tesla at the moment. How are you advising your clients with respect to that company? Well, it's so interesting you should say that because I had a friend of mine called me yesterday before the earnings and said by Tesla before the earnings and I was like, please don't because essentially just even looking at from a technical standpoint, it's been under a lot of pressure. Yes. The press about musk, the having to still raise money to buy twitter is out there but he's already been vocal about supply chain etcetera. So if it can get through to 40 that was my number. It had a clear there's a major support line coming in at 100 and 5100 and $60 and maybe at that point I'd be interested. So I would stand aside until I find some footing either here at 200 goes through to 40 or breaks 200 then winds up down around 1 51 60 now with all the earnings that we've seen so far. Of course we had, you know some big numbers out of companies like netflix and IBM etcetera. What indication do you have if any that there may or may not be a recession coming at this point? Well that's a really good question because the media has been scaring people. I mean technically we're already in a recession if you want to look at it just from straight the clients of G. D. P. But this is a very unusual recession. So basically what I've been telling people is trying to use all definitions to squeeze into current market conditions is like trying to find Cinderella for the right shoe to fit because we're not there yet. We don't know there's so many things that are different about this period in time that we've never seen before. Uh You know obviously coming out of a pandemic would be one inflation at record numbers with everybody thinking it's transitory. The Fed and their rate of change of interest rate rises is been also historic. They've done it so quickly. The dollar may have peaked. Then we have global situations and a war. So it's not clear recession. It could still be more of a stagflation although technically we need to see a way weaker jobs market for that to happen. So I'd say the jury's out and watch, watch what happens here I think really importantly with the small cap stocks because there could be more of a focus here within the domestic us in terms of re industrialization tech had been the big kingpin for years and years and years and that may switch, which may mean slow down but ultimately may be better in the longer run if we can actually get money here and stop relying so much on our imports, Michelle and you touched on travel earlier, of course we had american airlines group saying travel demand remains high instead despite robust airfares, the company even raising its profit forecast for the current quarter. Is it safe to say at this point that travel the travel sector will continue going strong in spite of the growing risks of this recession, it's like, again, I don't know if it's going to be the recession that would potentially stop airline growth people want to travel. And obviously the consumers are still booking trips. I mean even the cruise lines are starting to do well if you look at the stocks on Norwegian and carnival, they've done better. So what that tells me is that what would stop airline traffic now, obviously if we start to see another huge surge maybe in oil prices and two would be and God forbid some kind of reemergence of covid as we get into the colder months. But for right now we're getting into a season where people travel, I went myself a couple of weeks ago and I had never seen the security line as long as it was in Seattle. Uh So I think that right now um people consumers are fearful but I don't think they're necessarily really being pinched just yet and it would be more inflation that would pinch them I think than the idea of recession. Michelle. Thank you so much for your time and your insight there with us today. That's Michelle Schneider, partner and director of trading research and education for Market gauge dot com.