An Earnings Season Built For The Bulls?
The market saw one of its better earnings seasons in the second quarter of the year but this next period of earnings for the third quarter may not be something to ignore either. With the markets hitting new highs and continuing this latest uptrend in price, the highs could keep going higher with new earnings reports coming.
Within the coming weeks, we’ll begin to see companies report their results from the third quarter. Analysts are already speculating on a potential move that the S&P 500 could be set to see. According to FactSet, they see earnings coming in at 2.81% higher than last year’s period and sales are expected to rise just a hair under five percent (4.79%) compared to the third quarter in 2016.
“A mix of conservative guidance and a strong [first half of the year], continued economic growth, and positive incremental margins set the quarter up for an easy beat,” the investment bank wrote. “We think companies will once again deliver versus consensus expectations.”
Similarly, J.P. Morgan Chase & Co also echoed a similar market sentiment ahead of the next earnings season. They anticipate that overall earnings per share will continue to increase and “could be more than three times that of current consensus expectations.”
“Most of the activity variables we follow suggest EPS growth rate of 10% or more should be achievable in Q3…Economic activity was robust during [the third quarter], with strong global PMI prints, U.S. [Citigroup Economic Surprise Index] moving above zero, and ISM reaching the highest levels since 2004.”
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Results like this have helped to reassure investors that the catalysts ahead could stem from earnings and keep this but market raging.