26 Ιουλ 2016

First Bell: Early Reports from the US Q2 Earnings Season - The Financialist

First Bell: Early Reports from the US Q2 Earnings Season - The Financialist



It’s still early days in the second-quarter earnings season, but the picture so far is a relatively bright one for U.S. stocks. As of July 21, 77 percent of large-cap stocks, 78 percent of mid caps and 71 percent of small caps had beaten earnings expectations, figures that represent an improvement for each segment and are near the high end of a 16-year range. Value stocks of all sizes have driven that improvement, and the U.S. equity strategists on Credit Suisse’s Global Markets team believe earnings growth for value stocks will continue to outpace that of growth stocks in the second half of 2016 and early 2017. 

Overall, the strategists believe year-on-year earnings growth troughed in the fourth quarter of 2015 for mid cap stocks, the first quarter of 2016 for large-caps, and will trough in the second quarter of 2016 for small caps. Earnings growth should accelerate across the board through the second quarter of 2017. There is one cloud on the horizon, however: While the percent of upward revisions to earnings estimates has improved significantly from a recession-like 30 percent in the first quarter of 2016 to 48 percent on a rolling 13-week basis, four-week trends fell sharply late last week, suggesting that the upward trend may be a fragile one.