Wall Street raises the stakes as stocks hit records

The profit season is in full swing, Wall Street has a clear message to companies: only good not good enough.

The work on the market has strengthened this week that the thesis is increasing, with large banks such as JPMorgan (JPM) and Bank of America (BAC) that ends the week with silent gains despite strong profits and a message of consumer flexibility.

Netflix (NFLX), which is currently trading with approximately 40 times profits, has faced a highly slope to the broader market, and even many of its peers in the field of technology, a more clear reaction. The shares decreased by 5 % on Friday, although the flowing giant who was reported to be rhythm on both the upper and lower lines and raised the entire year instructions.

“Good” of “good” results and a guide was not good enough for high expectations.

This separation between performance and price interaction is not isolated. As the profit season rises, the broader market competes with high assessments and an increasing feeling that even strong results may not be sufficient to justify the current levels.

“The biggest risks at the present time are the evaluation,” Brian Jacobsen, chief economist at Annex Wealth Management, told Yahoo Finance on Friday. “When we look at the basics, I think this will improve. But to what extent do you pay for these basics?”

Companies have entered this profit season with low expectations, which are formed by the growth of doubts about definitions, politics and interest rates.

According to FactSet, analysts initially expected profit growth by only 5 % for S&P 500 (^GSPC) in the second quarter. This estimate increased to 5.6 % on Friday, as more companies reported stronger results than expected. If this number continues, this will continue to represent the slowest pace of profit growth since Q4 2023.

To date, 83 % of the S&P 500 companies that reported the estimates of the second quarter of the arrow’s profit, higher than the five -year average of 78 %. However, the average surprise of the 7.9 % profit is behind the five -year base of 9.1 %.

With a relatively easy tape, strategists warn that investors show little patience on any pitfalls.

“I expect that we will see a lot of fluctuations,” said Jacobsen. “The profit errors will be punished more than usual. I don’t think investors have patience to really deal with companies that lack any of these estimates.”

The stocks are currently trading in the highest levels after being exposed to a historic return since the Threats of the first “Tahrir Day” tariff in April, which briefly led to severe sales after pledged comprehensive duties on some of the largest trading partners in the United States. The White House later diluted its position, first gave him a 90 -day extension and then paid the deadline again to August 1.