Wednesday, July 25, 2012

Facebook Earnings Aftermath

It would be an understatement to say that Facebook's earnings release tomorrow after the markets close will be closely watched. I have no opinion on what the earnings are going to be like, but I will try to give my views on how the markets will trade on the news. The first outcome would be if Facebook (FB) beats expectations. This would give some additional confidence to the markets, but stocks won't roar from it. The second outcome is that FB disappoints, on either current earnings or guidance. If this were to happen and the stock sells off massively - the markets will tank due to the residual effects on investor confidence, especially retail investors. Morgan Stanley (MS) will also tank, and they are at critical support levels on its stock chart. Again, I have no clue what FB will do tomorrow regarding earnings. I am only stating how I think the markets will treat either outcome.

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