Look out your window. Spot the tree. Now look a little to the right. A little more. There! That's me waving at you from the limb I've crawled out on. Hi!
The market, you see, will close higher next week.
I can't guarantee it. I'm not taking you all out to Dairy Queen if I'm wrong. However, if any week can come to this sorry market's rescue, it will have to be the week that waits on the other end of this weekend.
I'm not just randomly calling my shot as I take my swings from the batter's box. I'm not necessarily eyeing the bearish hurler, running low after using up his best pitches earlier in the game. I'm not necessarily putting on contrarian cleats, just because short interest is skyrocketing. All I'm really doing is sticking my finger up in the air, liking the way the wind is blowing.
The dynamic duo
There are two good reasons why I think Mr. Market will be in an agreeable mood next week: Apple (NASDAQ:AAPL) and Intuitive Surgical (NASDAQ:ISRG). The two companies report earnings next week.
So what?
Oh ye of little faith in momentum, trends, and slugging percentages. Apple and Intuitive Surgical are the kind of heavy-bellwether bats that you would want on your side heading into a come-from-behind situation.
Apple and Intuitive don't keep the same company. Apple makes Mac computers, iPod portable media-playing devices, and iPhone handsets. Intuitive, on the other hand, makes cool surgical robots that are making operating rooms more efficient for patients and less fatiguing for surgeons.
The one thing they have in common is that, when they step up to the plate and take their swings, they don't miss. Apple has beaten analyst profit expectations in each of the 20 previous quarters. I'm not talking about simply meeting Wall Street guesstimates, either; Apple has actually topped the market's net earnings target for 20 consecutive periods. If you think that's impressive, Intuitive Surgical's streak of blowing past bottom-line estimates rests at 22.
Put another way, you have to go all the way back to late 2002 or early 2003 to find the last time that either company stepped up to report their numbers and missed -- or even simply met -- Wall Street's consensus projection.
Will Apple and Intuitive prove mortal one day? Sure. It may even happen next week. However, I'm a firm believer that the trend is your friend. It also helps that anecdotal evidence points to Apple gaining market share with its Macs and that Intuitive's business in health care is somewhat sheltered from economic setbacks.
Two bash brothers don't make up a team
Apple and Intuitive Surgical have amazing streaks going over the past five years, but there are also plenty of companies set to report next week with impressive credentials.
Here are just a few:
- Hasbro (NYSE:HAS) has dodged toxic toy recalls in delivering five straight quarters of market-thumping results.
- Chipotle Mexican Grill (NYSE:CMG) has been hotter than a chipotle pepper since going public, topping the pros in nine of its first 10 quarters.
- Amazon.com (NASDAQ:AMZN) may have put an end to its impressive accelerating revenue growth streak last quarter, but the country's leading online retailer has come out ahead of the pack in six of the past seven reporting periods.
- Enterprise solutions giant BMC Software (NYSE:BMC) has a modest four-quarter streak going. It also has come up big in seven of the past eight -- or 10 of the past 12 -- quarters.
- Baidu.com (NASDAQ:BIDU) has missed the mark just once since going public three years ago. China's leading search engine has handily exceeded forecasts in eight of the past 11 quarters, simply living up to expectations twice and barely missing once.
Add it all up and you have a basket of companies that should deliver, on average, good news on the earnings front next week. Isn't that what investing is all about? Fed bailouts may provide knee-jerk rallies like yesterday’s, but I'm talking about fundamental bailouts. With a chorus of companies letting the world know that things are just fine, rattled investor confidence should begin to fall in line. Next week should be a good week.
You heard it here first. Meet you at the Dairy Queen for anything but a Mr. Market Blizzard.
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