Earnings reports provide critical data on a company's performance and are closely watched by investors and analysts. They include key metrics such as revenue, net income, EPS (earnings per share), and guidance for future quarters. For example, revenue growth signals whether a company is increasing its market share or benefiting from rising demand, while EPS indicates profitability per share. Analysts also compare reported earnings with market expectations; exceeding expectations typically leads to a stock price increase, while missing expectations can result in sharp declines. Guidance—forecasts on future performance—can often have an even larger impact than current earnings, as it shapes investor sentiment about a company's growth trajectory.

Currency fluctuations significantly impact foreign investors holding US stocks. For instance, when the US dollar appreciates against an investor's local currency, the value of their investment increases upon conversion to their home currency, resulting in higher returns. Conversely, a depreciating US dollar can erode returns despite stock price gains in USD terms. For example, if a foreign investor holds a US stock that rises by 10% in USD terms, but their local currency appreciates by 5% relative to the dollar, their effective return is reduced. To mitigate this risk, some investors use currency hedging strategies to stabilize returns regardless of exchange rate movements.

Sector rotations are a common phenomenon where investors shift capital between different sectors of the economy based on changing market conditions or economic cycles. For example, during economic expansions, cyclical sectors such as technology, industrials, and consumer discretionary often outperform due to increased consumer and business spending. In contrast, during economic downturns, defensive sectors like healthcare, utilities, and consumer staples may see stronger performance as demand for their products and services remains stable. Additionally, macroeconomic factors like interest rate changes, inflation, or geopolitical risks can trigger sector rotations. Understanding these patterns allows investors to position their portfolios strategically to align with prevailing market trends.

Valuation metrics are crucial tools for assessing whether a stock is fairly priced relative to its earnings or growth potential. The P/E (price-to-earnings) ratio compares a company’s stock price to its earnings per share and is often used to evaluate whether a stock is undervalued or overvalued compared to industry peers or historical averages. However, the P/E ratio doesn’t account for growth potential, which is where the PEG (price/earnings-to-growth) ratio becomes useful. The PEG ratio adjusts the P/E ratio for a company’s expected growth rate, offering a more comprehensive view of valuation. For example, a high P/E stock with a low PEG ratio might indicate strong growth potential at a reasonable price, while a low P/E stock with a high PEG ratio could signal slower growth prospects. Both metrics are best used in combination with other fundamental and technical analyses for informed decision-making.