Thursday, 12 October 2017

What to expect from Q3 earnings season?

Posted by Valentine at 11:53 Labels:

Investors are lining up to take advantage of a new earnings season in the world’s first economy. American companies will start to release their third quarter corporate earnings reports this week and analysts are not being very optimistic about it.

In fact, market experts believe the third quarter earnings season will display the worst results of the year when it comes to profit growth. Earnings per share are seen rising by 3.8 percent in average, remarkably lower than the two-digit forecasts seen in prior quarters.

The last two earnings seasons collaborated to keep the Trump rally alive. However, changes are ahead and US stock indexes could soon face a downward correction if figures do not satisfy market participants.

Speaking only of S&P 500 components, an average of 73 percent have beaten earnings expectations, with some key banking sector players showing very solid results.

Bank stocks will be in focus this week as big names such as Bank of America, Citigroup and JPMorgan are due to release their financial statements.

However, analysts’ forecasts are not really promising. The banking sector is expected to show an average contraction of six percent for the last three months.

Of course, results above those expectations would provide great support for stock markets, pushing main indexes to fresh record highs as a possible scenario.

JPMorgan Chase & Co. will release its report on Thursday before the bell, with the Zacks’ Earnings ESP (Expected Surprise Prediction) standing at -0.53 percent.

Also in today’s session, Citibank Inc. will present its third-quarter earnings. In this case, the Earnings ESP points at -0.29 percent.

On Friday, attention will be directed to Bank of America Corp. and Wells Fargo & Company, with Earnings ESP of -0.66 percent and 0.03 percent respectively.

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