Finance: Earnings Season Starts | FinanceBrokerage
This week marks the start of the earnings season for this quarter, and investors are seeking clues over companies’ outlook.
In the previous months, the markets experienced trade war escalations, recession specters, and rate cuts from major banks.
Investors will be looking forward the see how such events affected companies in the past quarter.
The firsts to report are banks and brokerages like Wells Fargo, Goldman Sachs, and JPMorgan Chase.
Later in the week, reports from industrial, transportation, tech, and consumer sectors will flood the news.
On Wednesday, Netflix sand IBM will deliver their earnings reports. On Friday, Coca Cola will have its turn. Tomorrow, United Airlines will issue its statement.
At the same time, relevant economic data will also come out within the week. Wednesday will see retail sales, while Thursday will see industrial production data.
Refinitiv data expect S&P 500 earnings will show a decline of 3.1% for this year’s third quarter.
Finance Reports to be Grim?
This early, analysts are predicting that companies will focus on the effects of the trade war in their reports.
As a result, investors could get some clues over how much pressure the trade war had on the companies.
Over in the energy sector, oil price declines may have pushed down the profits of energy companies. Analysts are predicting that earnings will be down by 32%, while revenues may come weaker by 9.5%.
Company margins will also tell the same stories, analysts believe. They estimate a decline of 5.9% from the S&P 500’s EPS growth.
One analyst said that tech and communications companies are taking the biggest margin hits in the quarter.
These companies include Facebook, Micron, IBM, Amazon, Apple, and Alphabet. Collectively, their margins may have contracted by 14.8% in the third quarter.
The earnings season for this quarter comes against a backdrop of weakening ISM manufacturing data. This metric has shown a contraction in the activity for the past two months.