welcome to the investors trading academy eventof the week. each week our staff of analysts and educators tries to provide you a betterunderstanding of a major market event scheduled soon and that have an effect on the globalmarkets. october is often the most volatile month foru.s. stock prices. the reason why that's the case is because the fourth-quarter earningsseason, which begins each year in the second
apple stock price nyse, week of october, is the time that publiclytraded u.s. firms announce if they are doing better or worse than expected for the year.it's called the october effect, and from the data we have at this point of time, it lookslike 2015 will be a year in which the market may be prone to crashing during the month.while the longer-term stock trend can be attributed
to expectations for future earnings, the initialreaction to each report is usually caused by whether the company met, missed or beatanalyst expectations for the last quarter’s actual performance.analysts change their estimates for actual performance over time, and we can track thosechanges for the market averages as well as individual stocks. it’s not surprising thatthird-quarter earnings estimates have dropped from a 3.1% decline in july to a 5.8% descentin september. this is nearly twice as bad as analysts had originally expected.on the bright side, this means that the bar has been lowered, and actual earnings mayhave an easier time beating estimates on average, which may keep investor sentiment positive.that is usually what happens in this situation.
however, if companies aren’t able to beatthe already sandbagged earnings estimates, the shift in sentiment could be quite dramatic.with just a $12 billion market capitalization, metals specialist alcoa seems like an unlikelycandidate for the focal point of earnings season each quarter. yet tradition carriesa lot of weight on wall street, and for years, the metal maker's early reporting date hasgiven alcoa the role of leading market analysts into the new quarter. with alcoa set to reporton oct. 8, many investors see the company's anticipated slowdown in revenue and earningsas a signal for what's likely to be another quarter of weak results marketwide.but the earnings season has gotten underway, with results from 15 s&p 500 members alreadyout. these early reporters include such industry
leaders as nike, fedex and others – allof them have fiscal quarters ending in august, which we count as part of our 2015 q3 tally.we have more reports on deck this week, with a total 20 companies reporting results, including4 s&p 500 members. apple inc. is estimated to report earningson 10/19/2015. the upcoming earnings date is derived from an algorithm based on a company'shistorical reporting dates. according to zacks investment research, based on 16 analysts'forecasts, the consensus eps forecast for the quarter is $1.87. the reported eps forthe same quarter last year was $1.42.
