Six factors could help stocks during earnings season: layoffs, dollar/rates, Fed, China, infrastructure, chip stocks.
Jim Cramer, the host of CNBC’s Mad Money, recently discussed six factors that could help propel stocks higher this earnings season. These factors include layoffs, a weaker U.S. dollar, a possible end to interest rate hikes, the reopening of the Chinese economy, government spending on infrastructure, and upgrades to chip stocks.
The first factor is layoffs. Companies such as Microsoft, Salesforce, and Wayfair have recently announced head count cuts, and their stocks have reacted positively. This is because it shows that the company is taking steps to improve their financial performance by reducing costs.
The second factor is a weaker U.S. dollar. This has been beneficial for companies that conduct a large portion of their business overseas, as it makes their products more competitively priced.
The third factor is a possible end to interest rate hikes. This could mean that bad loan worries, and the possible ensuing damage to banks, could be over.
The fourth factor is the reopening of the Chinese economy. This is good news for companies in entertainment, travel, and consumer goods, as it means more customers for their products.
The fifth factor is government spending on infrastructure. This provides a “safety net” for companies that build roads, bridges, or tunnels.
The sixth factor is upgrades to chip stocks. Barclays recently upgraded Advanced Micro Devices and Qualcomm to overweight, which is a positive sign for the semiconductor industry.
Overall, Cramer believes that while earnings season may still be bumpy, any dips in stock prices may be buyable. He advises investors to download his guide to investing at no cost to help them build long-term wealth and invest smarter.