Earnings Season

Earnings season kicked off with a bang, and U.S. stocks added 2% to recent gains this week. Utility and Technology names led the way higher, while Energy stocks lagged.

Investors celebrated some positive economic data from around the globe. For example, U.S. December home starts were reported at the highest in 13 years. Additionally, Chinese industrial production increased by more than expected last month.

The two countries also finally signed Phase One of their trade deal on Wednesday. Even so, tariffs will continue to be levied as China and the U.S. now tackle the difficult task of discussing intellectual property and technology transfer rights

The financial sector kicked off the fourth quarter earnings season this week with most companies exceeding consensus expectations. Next week will also be busy on the earnings calendar.

IBM (IBM) and Netflix (NFLX) will start things off on today, followed by Johnson & Johnson (JNJ) on Wednesday. Intel (INTC) and Procter & Gamble (PG) headline the reporting calendar on Thursday.

To date, 9% of the S&P 500 has posted quarterly results, with 70% beating profit expectations. This is near the historical average, but aggregate earnings are down 0.8% from the previous year.

One thing we’re watching these days is the concentration of wealth among the largest publicly-traded stocks in the U.S. This week, Google (GOOGL) joined Apple (AAPL) and Microsoft (MSFT) in the $1 Trillion club, less than 16 years after its IPO.

The five largest companies in the S&P 500 now account for 17.3% of the total index value. This is the highest level since 17%, back in 2000.