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Earnings Season Unpacked: Expectations vs. Reality in the Stock Market

Market Movers: The Opening Bell

October 23, 2025

Video Transcript

After new records for the Dow on Tuesday, volatility returned yesterday with the major averages pulling back.

On this Thursday morning, we are looking at the Dow, Nasdaq, and S&P 500 trying to hold on to session gains.

Now we are in the thick of 3 quarter earnings season.

Coca-Cola and 3 and led the Dow pass 47,100 on Tuesday, but 12% revenue growth wasn't able to drive Tesla shares higher.

Now investors will be watching, of course, for tomorrow's CPI figures, the first economic report we've had in a while.

Joining me on this Thursday morning is Gaby Verroy, who's the CEO and founder of Latino Wall Street.

Good morning, Gaby.

Thank you so much for joining me.

So we've been seeing back and forth trading and the markets have reversed course.

So what do you make of all the volatility we've seen in equity markets?

Yes, I mean, good morning.

It's very interesting all the volatility that we're seeing, and it's basically uncertainty, right?

We have a lot of uncertainty right now because we keep going back and forth about tariffs with the government, with China.

We thought we were starting a new trade war and then we said never mind.

And then we said, oh, actually it's November 1st.

You know, they might get 155% now it's the tariffs that were we're threaten them with on November 1st, but it's not confirmed, of course, and it's just this constant back and forth and if there's something we've learned about this year that is about to end, is that what has given us the most volatility is this new administration specifically when it comes to tariffs.

So that's been a huge part.

Also, the government shut down.

Even though it has kind of helped the markets because we know it's a temporary thing and it's not going to last forever, just the fact that we don't know how long it's going to last, that's not a very good sign.

When we started this week, the White House said that we should reopen this week.

Well, here we are almost at the end of the week, and there's no sign of that.

So all of that is not going to help.

The earnings that also brings a lot of volatility.

It's, it's very interesting because some.

Sometimes we think a company is going to do great, but it's not always so fair.

It's, it always depends on the expectations that the analysts have, so it's not always as easy as, oh, if they had great revenue this last quarter, then we'll be in an upward trend for the stock.

It it's not as simple and this is where it gets a little bit frustrating and complicated.

That it's all about expectations and that's what we're seeing with Tesla now, for example.

Yeah, and Gabby, you bring up an important point here because last week we spoke about the big banks and this week we've been hearing from airlines, consumer names and as you mentioned, uh Tesla as well.

So what were your thoughts on Tesla as well as IBM?

Yeah, so I think those are great companies, obviously they're strong companies, but it's, it's more about the expectations, as I said, we had great expectations, especially for Tesla.

They're innovating so much and now we didn't beat those expectations.

So even though the revenue was there, the revenue was strong compared to the last few quarters, then.

And unfortunately the stock is not doing well today because it's all about expectations and it's very similar with the economic data, right, the earnings and the economic data, they work very similarly that it's what matters is what are the projections and are we going to meet those projections or not if we fall.

Under that, below that, then it's not, it's not good for the stock.

So I still think Tesla, it's a great company, however, the expectations didn't help the stock today.

Yeah, and Gabby, speaking of expectations next week, the final week of October, hard to believe, but it is that time of year, and that means we will be getting the Fed meeting for the month of October and also we will get the APEC summit at the end of the week kicking off as well.

But when it comes to expectations and Certainty.

We are expecting a 25 point rate cut at the Fed's October meeting next week, and we will have that CPI figure tomorrow morning.

So what do you think the market is watching out for when it comes to inflation as well as the Fed for the rest of the year?

Well, we want to see inflation under control, of course, again, it's the economic data very similar to earnings, all about the projections, right?

So when I go on market watch I can see exactly what are we, what was the last report of the CPI the previous month and what are we expecting?

We don't want anything above those expectations in the case of inflation because we don't want it worse than than what we think it's going to be.

I think gold has been out of control recently for that exact reason that is forward looking and gold can see the future and they can see how this monetary policy, even though it's celebrated all more rate cuts, more rate cuts, everyone wants more rate cuts whether you're an investor or consumer, but that has consequences, right?

And we're gonna have to live those consequences sooner or later and those consequences are that this monetary policy is inflationary.

So that's why gold has been in in a historic rally, and we should continue to see that as we continue to cut more rates because rate cuts again are inflationary.

OK, Gaby, well, we will have to leave it there, but as always, thank you so much for joining us and thank you so much for sharing all of your insights as well as your perspective.

Thank you.

“Even though the revenue was strong compared to the last few quarters, then unfortunately that stock is not doing well today because it’s all about expectations.” – 03:31

Remy Blaire engages in a compelling discussion with Gabriela Berrospi, the CEO and Founder of Latino Wall Street. The segment opens with a recap of the recent volatility in the equity markets, following new records for the Dow. Remy notes that the major averages—the Dow, Nasdaq, and S&P 500—are attempting to hold onto session gains amidst the ongoing third quarter earnings season.

Gabriela provides her insights into the current market dynamics, attributing much of the volatility to uncertainty surrounding tariffs and trade relations with China. She explains the back-and-forth nature of government negotiations, which has created a climate of unpredictability. Gabriela highlights the recent government shutdown, acknowledging that while it has had some temporary positive effects on the markets, the lack of clarity regarding its duration raises concerns.

The conversation shifts to the earnings reports from major companies, including Coca-Cola, 3M, and Tesla. Gabriela emphasizes that despite Tesla’s impressive 12% revenue growth, the stock has not performed well due to unmet analyst expectations. She elaborates on the importance of these expectations, noting that the market’s reaction often hinges on whether companies meet or exceed projections.

As the episode progresses, Remy and Gabriela discuss the upcoming Federal Reserve meeting and the anticipated 25-point rate cut. Gabriela stresses the need for controlling inflation and the market’s keen interest in economic data, particularly the Consumer Price Index (CPI) figures set to be released soon. She warns that while rate cuts may be welcomed by investors and consumers alike, they can lead to inflationary consequences, as evidenced by the recent rally in gold prices.

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