Earnings Season Begins in Earnest Monday

Earnings Season Begins in Earnest Monday

$SPY, $JPM, $BAC, $C, $MS, $WFC, $MU, $NFLX

Global stock markets have suffered in recent weeks on fears that economic growth, and company earnings are on the decline.

Upcoming US company earnings will test this view beginning Monday with the big banks, all of which have been hammered in Y 2018.

The big names due to issue Q-4 results this week include Micron Technology, Netflix, and major Wall Street banks Citi, JPMorgan and Wells Fargo.

Money started moving back into equity funds last week thanks to Fed Chairman Powell’s dovish comments.

But earnings expectations remain low nevertheless: I/B/E/S Refinitive data indicates S&P 500 (SPY) earnings will have grown 14.5% in Q-4 of Y 2018, the slowest since Q-3 of Y 2017, sharply lower than the 28.4% rise in Q-3 of Y 2018 and almost flat Y-Y.

And confidence in Europe is even lower.

EPS for STOXX 600 companies is expected to have grown 7.1% in Q-4, half levels seen in Q-3 and Q-4 of Y 2017. Forecasts as recently as November were for 14% growth but a run of nasty macro-economic surprises has caused analysts to downgrade their view.

Some strategists reckon markets have got ahead of themselves by pricing in a growth slowdown or recession. Company results could show who is getting it right. So stay tuned…

Have a terrific week.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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