We are lucky in the financial world that we get to celebrate four Super Bowl-level events a year. By that we mean the earnings season, which typically starts a few weeks after the end of each quarter. 

It’d be a slight overstatement to say that investors live for earnings season, but at the same time, it’s not out of the ordinary to see analysts waking up at 4 a.m. to read earnings reports and tune into calls—many of which happen before the market open. Some also stay late to track releases and calls after the bell. 

Earnings are crucial to the direction of the stock market. 

The report shows what’s happening to revenue and profitability through the latest income statement, balance sheet, and cash flow statements, helping analysts with their fundamental analysis of a stock.

Then an earnings call, which most companies opt to do, lets investors and analysts know what corporate executives are seeing in terms of current and upcoming trends for everything from supply-chain navigation to pricing power to consumer health. 

The combined information from the report and call can lead to stock swings and influence decision-making on whether to buy, hold, or sell a stock. That’s why earnings are called the true driver of stock returns. 

We will break down this topic through the lens of our own earnings report note that is sent to investors’ inboxes daily during the season. The note focuses on the S&P 500 because that is a widely tracked index, considered to be a good representative of the broader market.