Earnings Season Heats Up, But Trump Policies Cast Shadows

Key Takeaways:

* 81% of S&P 500 companies beat analyst earnings estimates.
* Materials, real estate, financials, and tech sectors lead the beats.
* Energy and healthcare sectors underperform.
* "Magnificent Seven" companies show strong results, led by Meta and Microsoft.
* Uncertainty over Trump administration policies dampens CEO confidence and guidance.

Market Performance:

* Stocks maintain upward momentum despite recent DeepSeek-related volatility.
* IBM and GM provide guidance above consensus, but leave risk exposure to tariffs and immigration policy changes.

CEO Commentary:

* IBM CFO Jim Kavanaugh: "Stabilization is prudent... we're seeing implications of tariffs."
* GM CEO Mary Barra: "We have levers to minimize tariff impact... we've spoken to the president, who wants a strong manufacturing sector."

Analyst Concerns:

* Limited worst-case scenario guidance for 2025 could disappoint investors.
* Uncertainty over Trump policies has frozen risk-taking and limited corporate guidance.

Conclusion:

Earnings season continues to deliver positive results, but investor sentiment remains cautious due to uncertainty over Trump administration policies. Lack of clarity on tariffs and immigration could impact guidance and performance, particularly in sectors reliant on globalization and labor mobility.