O’Shares ETFs founder Kevin O’Leary was quick to dismiss the trade disputes having a tangible effect on the strength of companies beating earnings forecasts, but also pointed out that the markets have been range-bound and flat.
O’Leary’s comments came after PepsiCo posted better-than-expected earnings on Tuesday, helping to give the markets a much-needed boost and reprieve from the trade disputes that have relatively muted company fundamentals the past month.
“We’re getting great earnings and yet the market remains relatively range-bound and flat,” O’Leary told CNBC.
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Looking at the year-to-date chart of the Dow Jones Industrial Average, after reaching a peak in January, it has been trading sideways. Nonetheless, it has been trading above its 200-day moving average, dropping below for about a week and then picking up again just in time for second quarter earnings reports.
Additional Round of Tariffs Scheduled
It will be a battle between earnings and tariffs in the forthcoming days for the markets as U.S. President Donald Trump is readying a list of an additional $200 billion in Chinese products that will be subjected to tariffs. As the official, published list begins to make its rounds, it will be interesting to see how the markets digest the news, particularly when companies like Delta Air Lines, Citigroup, JPMorgan Chase & Co, and Wells Fargo are all scheduled to release their second quarter earnings.
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