Trump’s Tweak to Earnings COUND UPEND WALL STREET’S TRADING BUSINESS

President Donald Trump’s Next Target: Revamping a Wall Street Tradition.

The President Said US Companies Should Be Required to Report Earnings Every Six Months Insery Three. Trump, who raissed the idea on Truth, Said Doing So Wow Save Companies Money and Allow Managers to Spend More Time Running Their Business.

Meanwhile, Market Experts Were Split on the Idea, Highlighting The Benefits The Change Wouuld to Companies Along With The Challenges It Wauld Pose for InvestorsWrites Bi’s William Edwards.

How and when Companies Report Earnings has become a topic of debate in recent years. High-Profile Executives like Blackrock’s Larry Fink, JPMORGAN’S JAMIE DIMON, and WARREN BUFFFETT HAVE ALL CRITICIZED PARTS OF THE EARNINGS PROCESS, SAYING IT INCENTIONS SHORT-TERM Thinking Among Investors. Trump First Suggested a Change in 2018.

As Companies Stay Private for Longer, Anyding that softens the Blow of Becoming A Public Company Could Also convince more businesses to make the jump.

Still, Fink, Dimon, and Buffett Didn’t Suggest Reducing the number of Earnings Reports. Their Earnings Issues Revolve Around the ForeCasting That Executives Provide. Future Projections Can Lead to Knee-Jerk Reacers from Investors That Send A Stock Skyrocketing or Plummeting. That can incentivize Management to Chase Short-Term Wins Rather than a More Sustainable Long-Term Strategy.

But tweaking earnings and disclosures Also Raises Questions About Transparency. That’s particularly Concerning for Retail Investors, Who Don’t Have the Same Resources as Their Professional Counterparts that are Willing to Shell Out Big for All Kinds of Wonky Datasets.

A Corner of Wall Street Benefits from Earnings

One cfo i spoke to shared an Illuminating reason Quarterly Earnings Likely Aren’t Going Anywhere.

Nor annoying and expensive as earnings reports can be for companies, they represses Big Business for those facilitating the trading they spark.

Banks, Broker-Dealers, and Exchange Earn Fees from Trading, and Nothing Sparks a Market Feeding Quite Like a Big Earnings beat or Miss. Earnings forecasts, as Painful as they are for companies, Can Also Give Investors More Reasones to Trade, which is good for Business.

SOHICE PUBLIC COMPANIES MIGHT WANT A BREAK FROM EARNINGS, OTHERS VIEW THEN A KEY CATALYST KEEPING PEOPLE TRADING.

Think of it like the week injury report in the nfl. (Stay with time.)

Coaches Hate Having to Disclose Their Players’ Injuries Publicly. In a Show of Protest, Bill Belichick Famously Listed Tom Brady On The Injury Report for Years Despite Him Being Healthy.

Still, The League Requires it. Why?

Because IT’S KEY INFORMATION THAT GAMBLING SITES USE TO ACCUrately Set Betting Lines for Games. Without Knowing who is or isn’t playing, sportsbooks Woldn’t Feel Comfortable Taking Bets on Games.

I’m not suggesting that Investing and sports gambling are an an appples-to-appples comparison. (One is Clearly More Serious; I’ll Let You Decide Which.)

Howver, Its Easy to See How Earnings and Injury Reports Both provides information that crucial to keeping the market around their industries running.