The earnings season in the United States has not started on the best possible foot. Companies continue to improve their results, in general, and also beat the growth expectations expected by analysts, but not at the pace at which they usually do so: with a third of the S&P 500 companies having already accounted for the market , 75% of them have managed to beat the income expectations set by analysts. This data, however, is the lowest that has been seen since the last quarter of 2022and confirms fears that there is a slowdown in economic activity in the United States. In the coming days there may be the key to confirming whether the season will be disappointing, or whether it will be reversed, with 42% of the index’s capitalization presenting its accounts this week.
Although the earnings season in the United States started on the right foot, with the start of large firms in the banking sector far exceeding expectations, as the days have gone by, spirits have cooled, to the point that the percentage of companies that have positively surprised analysts with their accounts is the lowest in two years, since the end of 2022. Only 75% of the firms that have presented results have improved analysts’ expectationswith a third of the total S&P 500 having already presented its accounts.
The data it collects Bloomberg Intelligence They confirm how the sectors that are having the most problems in exceeding the expectations of results that analysts maintained are industrial, telecommunications and public services. In all three, the average surprise has been negative to date, with public sector firms presenting sales revenue, on average, 4.41% below expectations; In the industrial sector, with 42 of 94 companies having already published, sales have been 0.3% worse than expected, while in telecommunications the percentage is 0.25%.
The slowdown in the growth of sales of industrial companies is especially striking, since it is a sector that anticipates economic activity, and could now be reflecting that the growth of the world’s leading economy is going to encounter problems in recovering in the next few months. We must not forget that, in a year in which the American stock market is showing good results, in recent months some signs of macroeconomic weakness have appeared that anticipate a possible slowdown in the country.
The results season will continue in the coming days with intensity, since this week a group of important firms present their accounts, among which are index giants such as Microsoft or Meta. In total, 42% of the total capitalization of the index is called to present its third quarter accounts in the coming daysand the market has put a lot of weight in recent months on the expectations of growth in business profits of the companies that can benefit most from the development of AI, such as the Magnificent Seven, the large technology companies on the North American stock market.
There is another sign that seems to reflect how investors are now less optimistic than they were before earnings season began. Until last week, a company that surprised analysts’ expectations with its accounts ended up rising 1.7%, on average, after the presentation. That rise is getting smaller and smaller, and has been lowered in the current earnings season to 1.3%.
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