Why Lindsey Bell Believes Stocks Will Rise On Q3 Earnings Season

On CNBC’s “Trading Nation,” Lindsey Bell said that stocks typically react well to the third-quarter earnings season.

Corporate management teams start to talk about the next year and give an indication of what’s to come, she added.

The third quarter this year in the first in four quarters that will see earnings estimates move a little lower, and the stock market has also been under pressure going into the reporting season, Bell said. So, stocks are set up to perform well.

Bell believes the fate of the stocks will boil down to the commentary on margins and pricing pressure.

Through the pandemic, a lot of management teams refrained from announcing their guidance, and analysts have been “flying blind,” she pointed out. So, we have seen companies beat expectations in a big way over the past couple of quarters.

The set up looks the same this time but there is no guarantee for numbers to beat expectations or for stocks to move higher, Bell noted. The market will favor companies that are high quality, can handle higher costs and are able to pass through pricing power to the consumer, she added.