Volatility makes extended trading hours useful for Australian investors

War in Europe, inflation and the tailwinds of the pandemic are testing businesses like never before. Identifying resilience in uncertainty is key to this US earnings season.

New York Stock Exchange trading floor

Microsoft is expected to release its March quarter results on April 26. Despite the difficult start to the year, the market remains confident in the IT leader’s ability to grow and therefore expects quarterly EPS to rise from $1.95 to $2.18 per share.

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Global search engine giant Google (Alphabet) will release its first-quarter performance on April 26. Current expectations are for Alphabet’s revenue to grow 23.1% year-over-year and 20% for EBITDA.

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The latest US earnings season is in full swing and presents excellent opportunities for Australian investors to identify the fundamentals indicative of corporate resilience in Q1 earnings.

As some of the world’s largest publicly traded companies report another period of significant turmoil – this time including war in Europe, continued lockdowns in China and rising inflation concerns internationally – investors will need to be ready to take advantage of opportunities and respond to the latest company news and results before and after market hours.

Volatility also ratcheted up a notch this week with U.S. consumer prices surging 8.5% in March, unprecedented growth since 1981 and the most acute rise in costs at the gas pump. petrol as well as for essential products such as basic foodstuffs. These continued increases are having an additional impact on the costs of running businesses, resulting in thinner margins, just as businesses face additional stress from negative consumer sentiment.

“This earnings season seems like a big test for all businesses, which are going through one of the toughest and most complicated times in decades,” said Hebe Chen of IG Australia. Yahoo funds.

Converging inflation headwinds, geopolitical uncertainty and supply chain issues have created an economic outlook that is difficult to predict, Chen said. So expect this earnings season to shine a light on companies that can show resilience in their ongoing response to change.

“From my perspective, I think it’s safe to say that adapting to change has become the key driver for the past two years, and will remain so for the coming year,” Chen said.

Geopolitical tensions aside, COVID-19 uncertainty persists more than two years into the pandemic, with major U.S. companies experiencing headwinds differently. Some of those that were doing well before the pandemic, like Meta/Facebook, saw their customer growth slow to a halt. While others that have done well during the pandemic, such as Zoom and Netflix, succumb to a post-pandemic period and stock prices have fallen in recent quarters, following further changes in the way people live. and work.

“No company is immune to this, as the whole world is entering a new phase, the competitive landscape in different industries will also face new changes,” Chen said.

From an investor’s perspective, companies that demonstrate an ability to identify and react to opportunities in a changing environment would be more favorable.

Chen also noted that other factors are contributing to the pressures facing companies, including the massive growth of the entire S&P 500 in 2021, which has significantly raised the bar for growth expectations.

Chen says investors would be wise to keep an eye on company fundamentals this reporting season, particularly earnings growth, profitability and cash flow. Staying well informed and up to date with the latest news is also essential, given the continued global volatility.

As such, after-hours trading opportunities can be useful for traders not only to take advantage of new stocks, but also to manage risk on existing portfolios.

“The market does not sleep. Especially for most US earnings, when companies report earnings outside of the main session. So if you can access it after trading hours, you can react quickly to breaking news and get a head start.

Meanwhile, trading after hours also allows traders to manage risk within existing portfolios, anticipating news or upcoming reports that may have an impact.

Not all brokers offer access to extended trading hours, so it’s important to check what access you have and be prepared for this season.

“IG Australia is offering extended trading hours on 70 ‘all-session’ US stocks, including Amazon, Tesla and Facebook.” Chen said.

“We regularly see our clients actively trading in the pre and post trade sessions, and this can increase the majority of our daily volume on this stock, when it is a popular stock that has seen a major move,” Chen said.

It’s a slight rise that shows how traders are preparing for the trading seasons and keeping a close eye on company announcements, breaking news and falling reports, knowing how important this current period of volatility is.

More than 70 key US stocks can be traded during IG’s extended hours.

All trading involves risk. You may get back less than you originally invested. Consider taking steps to manage your risk and be sure to monitor your positions. Fees and charges may apply. Issued by IG Australia Pty Ltd ABN 93 096 585 410, AFSL 515106.

Garland K. Long