Tuesday, November 30

Wall Street shines with earnings season about to end


Earnings season is going from strength to strength on Wall Street, the benchmark exchange for the rest of the world markets. Specifically, when the season is about to end (with 90 percent of companies having published their accounts), 81 percent of them have exceeded their expectations.

This is a very high percentage and exceeds the average of 72 percent of the last five years, according to data from Julius Baer.

The companies that beat the perspectives exceed the average of the last 5 years on Wall Street

Likewise, net margins have risen to a new record of 12.2 percent for companies on the S&P 500, the benchmark on Wall Street; compared to 11.6 percent in the first half of the year.

By type of business, the energy and financial sectors are the ones that are doing the best in the photo finish of the quarter; while on the opposite side are materials and basic consumption, having negatively surprised analysts.

In this way, it could be said that the companies that have the greatest power to pass on the increased costs to prices are the ones that have weathered the difficulties best that have occurred in the last quarter, related to inflation and the disruption of global supply chains, according to experts from the Swiss bank Julius Baer.

Likewise, consumption has been supported by the generous fiscal transfers promoted by the Joe Biden government in the White House.

Caution for the next seasons of results

Still, analysts are cautious about the future, according to a recent comment by the Swiss bank, signed by Mathieu Racheter, Head of Equity Strategy Research.

“It is interesting that, despite the good results obtained in the third quarter of the year, analysts are being very reluctant to improve their earnings per share prospects for 2022 due to uncertain macroeconomic forecasts and rather cautious guidelines on the part of the companies ”, says the text.

Specific, earnings per share growth outlook is 7 percent next year for US S&P 500 companies.

“It goes without saying that 2021 has been an excellent year and that we are unlikely to see such high year-on-year earnings growth in the near future,” the document said.



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