If we learned anything from the disappointing Netflix (NFLX) earnings announcement on Monday evening, it’s that the current market is going to flip-flop day by day, earnings report by earnings report for the near-term. Of course, we’ll have a much clearer picture of the overall health of June quarter earnings by the time the closing bell rings this Friday, when 35 percent of the S&P 500 will have reported earning. Those same reports are going to give us a preview of the likelihood of the 13 percent earnings increase required to meet expectations for the second half of the year, or as we expect, many firms will be adjusting earnings downward.

Let’s just say we feel like we’re nearing the crest of the rollercoaster ride.

In this week’s Tematica Investing:

• Earnings start to take a toll on the market and with much more to be had we are holding steady with the Tematica Select List
• Introducing our S&P 500 beating Thematic Index, which is comprised of 170 companies and reflects all 17 of our proprietary investment themes.
• Tematica Select List earnings on tap this week – AT&T (T) and Starbucks (SBUX)
• Updates, Updates, Updates

Click the link below to download the full report.

Even as the market continues its melt-up, we still maintain our cautionary approach. We’ve been asked if we feel a little bit like Chicken Little screaming that the sky is falling. The answer to that is an emphatic no.

As we always maintain, we let the data do the talking — not the headlines — and when we dig into the specifics in the earnings we’ve received thus far, what we see is not good news. While we have to tip our hats to these companies for doing what they can to generate the EPS headlines, it’s not the underlying health of their business that’s driving these results.

In this week’s Tematica Investing:

• As we march hip deep into 2Q 2016 earnings season, the S&P 500 has climbed to a new all-time high despite a smorgasbord of uncertainties that lay ahead.
• The earnings reports we have received for the June quarter are a mixed bag, favoring EPS misses and recast outlooks. This reinforces our view that earnings expectations for the second half of 2016 are overly robust and there is a high probability they will be reset over the coming weeks.
• Even those few reports we’ve received and were ahead of expectations do not paint a vibrant picture of what’s to come in the coming months. As an example, we break down Alcoa’s (AA) 2Q 2016 results.
• Given a risk to reward outlook that at least for the near-term favors more risk than reward, we will sit on the sidelines with new additions to the Tematica Select List as we instead roll up our sleeves to identify new contenders and digest the coming earnings deluge.

Click the link below to download the full report.