As of Friday, the S&P 500 reported about 10% of its fourth-quarter earnings, according to RBC Capital Markets.
RBC Capital Markets says the S&P 500 earnings backdrop is softening, posing a challenge for stocks in the “very near future” even as companies so far outperformed expectations in the fourth quarter. It is
Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, said in a research note on Monday that companies’ earnings pace beat consensus expectations “as the S&P 500 reached 10% as of Friday.” slowed down, he said. According to the report, 69% of companies beat his earnings per share (EPS) expectations for the fourth quarter results, and 65% beat consensus earnings estimates.
Pointing to charts showing the percentage of companies above consensus on EPS and revenue, Calvasina said, “Both stats are a bit lower than they were during the third quarter earnings reporting season.”
“Overall, we continue to see signs of a softening earnings backdrop for the S&P 500, but it’s safe to say expectations aren’t dropping just yet,” she said.
The S&P 500 earnings per share forecast for 2023 is now $226, suggesting 2% year-over-year growth, Calvasina said. She wrote that the consensus S&P 500 EPS growth rate was “still slowing down” in the fourth quarter and this year, but will pick up in 2024.
As for the consensus EPS forecast for 2023, “We’ve seen a broader downturn in forecasts over the past few months, driven by all sectors except real estate investment trusts, utilities, consumer staples, and industrials.” RBC to the notebook.
Meanwhile, the Conference Board announced on Monday that US leading economic indicators fell 1% in December. That exceeded the 0.7% decline expected by economists polled by The Wall Street Journal.
See also: This key economic indicator continues to predict a recession
At the last check, the U.S. stock market surged Monday afternoon, with the S&P 500 up 1.5% to around 4,031, the Dow Jones Industrial Average up 1% and the Nasdaq Composite up 2.1, according to FactSet data. % increased. The data showed that the S&P 500 has broken above his 200-day moving average of about 3,966.
Mark Häfele, Chief Investment Officer at UBS Global Wealth Management, said: “With the first full week of the fourth quarter earnings season coming to an end, the results are not surprising and exceed our expectations. It was just overwhelming,” he said.
“The slowing U.S. economy is likely to keep pressure on businesses,” he said. “We don’t think there’s much room for the market to recover in the near term, especially given the outlook for continued pressure on corporate earnings growth.”
– Christine Izelis
(Closed) Dow Jones Newswire
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