Good morning, traders.
Trading through earnings season is like stepping into a bar fight.
Throw in the latest tariff headlines and it turns into a bar fight in the dark.
Volatility spikes. Reactions turn emotional. And fundamentals? They still matter … but only if you know when they matter.
I’ve seen this play out for decades — first from a trading desk on Wall Street, and now from behind my own screens in Miami.
When companies are set to report earnings, especially during periods of macro noise like a tariff spat, traders often trip over their own analysis.
They’re so focused on what a company should be worth that they miss when that value might actually get recognized — or completely ignored.
Let’s break it down.
Tick Tock: Timing Is Fundamental
Earnings season is where stories meet reality. It’s where companies show their hand.
You want to know how revenue and margins held up, sure — but you also need to know what kind of market mood you’re walking into.
A company might post solid numbers, beat on EPS and revenue, and still get crushed.
Why?
Because guidance spooked investors. Or because some tariff-related noise shook the broader market that morning.
A perfect example: Johnson & Johnson.
The company’s stock slipped 0.69% Tuesday, even though Q1 earnings surpassed expectations.
Why?
Uncertainty around pharma tariffs.
When headlines about tariffs (or interest rates, or geopolitics, or oil shocks — take your pick) hit during earnings season, the market doesn’t weigh fundamentals the way it normally does.
It reacts first and thinks later.
That’s why you don’t just need a thesis — you need a clock.
Timing Is Everything
I’ve always told my students this: You can be 100% right on a trade’s direction and still lose money if you’re early. Or if the stock gets pushed around by something unrelated to your setup.
When tariffs become the market’s obsession, you have to respect that.
You can’t just look at a company’s trailing P/E and say, “Oh, it’s cheap, time to buy.”
The market doesn’t care if the stock is cheap when everyone’s panicking about higher costs, disrupted supply chains, or retaliatory restrictions.
Instead, let the dust settle. Watch price action around key levels. Track implied volatility and see what the options market is pricing in.
Look for confirmation, not just valuation.
Let’s say a semiconductor company reports strong numbers, but their CEO drops a vague line about “international headwinds.” The stock tanks 8% on the open.
Fundamentals still look great, but now the market’s pricing in risk from tariffs. Do you go in and buy the dip?
Not yet.
Wait.
Watch how the stock trades in the next few sessions. See how institutions respond.
If it starts building a base — if you see volume dry up on the downside and strength return on lighter news — you’ve got a setup.
That’s when fundamentals can start to work again.
Know the Order of Operations
This is what separates pros from amateurs. Amateurs treat earnings like a casino bet. Pros treat earnings season like a minefield — with a map.
Start with the fundamentals: Is this a company with real growth? Clean balance sheet? Resilient margins?
Then factor in the macro: Are they exposed to tariffs? Have they hedged their risks? What sector are they in — defensive or cyclical?
Finally, and most critically, time the entry: Are options overpriced because of tariff drama?
Is the stock oversold and stabilizing? Can you structure a trade that gives you staying power if volatility keeps slapping headlines across your face?
Here’s the Bottom Line
Fundamentals tell you what to trade.
But timing — especially when tariffs are tossing grenades during earnings season — tells you when to trade it.
Don’t ignore the macro noise.
Use it.
Tariff fear creates price distortion. If your thesis is strong and the timing is right, you get paid more for the same level of risk.
But if you jump in too early, you’ll get stopped out before your idea has a chance to breathe.
So when the next round of earnings drops and the tariff headlines are flying — take a breath.
Read the tape, and remember: The best trades are the ones that wait for the market to come to them.
Jeff
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