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Solid earnings will steady shaky US and European markets

Article By: ,  Financial Analyst
June 28, 2017 7:08 AM

U.S. and European stock markets are in correction mode this week, but the sell-off isn't due to worries about the upcoming earnings season. 

Our research shows that second and third quarter earnings are expected to be robust, continuing an upward trend that brought some of the biggest jumps in profitability among large companies on both sides of the Atlantic in a decade.

Before we dive in, a few notes about the data tables below.

  • The column labelled 'Percentage of Cos. Yet to Report' refers to second quarter results in all three tables
  • Whilst our main focus is the second quarter, given that it is the one most groups will soon report, we also offer a look at how Q3 forecasts are trending. The columns for those trends are labelled 'Q3 revision mean chg. - 30d'. That stands for the percentage difference between the most recent aggregate forecasts and those from 30 days ago.
  • All forecast data was sourced from Thomson Reuters earlier this week, and relate to companies listed on the U.S. S&P 500 index, London’s FTSE All Share Index and for Europe, the Euro STOXX 50 index.
  • Cells ended up blank if no companies in those sectors were set to report earnings or revenues in the given quarter. This happens because unless they have a large U.S. listing, British and European companies are only obliged to report statutory earnings twice a year.

S&P 500 FORECASTS

EARNINGS

REVENUE

 

SECTORS

Percentage of Cos Yet to Report

Q2 YoY  Growth

Q3 Revision Mean Chg.. - 30d

Q2 YoY Growth

Q3 Revision Mean Chg.. - 30 days

Health Care (61)

100%

2.40%

0.00%

3.70%

0.00%

Energy (34)

100%

649.90%

-2.90%

15.70%

-0.40%

Industrials (67)

97%

2.10%

0.30%

2.70%

0.00%

Consumer Discretionary (85)

93%

0.60%

-0.50%

3.60%

-0.20%

Consumer Staples (36)

97%

3.10%

-0.30%

1.20%

0.00%

Materials (25)

100%

3.20%

-0.10%

6.00%

0.70%

Financials (66)

100%

7.00%

-0.30%

2.60%

-0.10%

Information Technology (68)

94%

11.30%

-0.60%

7.20%

0.00%

Telecommunication Services (4)

100%

0.80%

-0.80%

-2.10%

-0.20%

Utilities (28)

100%

-2.30%

0.70%

7.40%

4.70%

All Companies (505)

97%

7.70%

-0.30%

4.50%

0.10%

Source: Thomson Reuters and City Index

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

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FTSE ALL SHARE FORECASTS

EARNINGS

REVENUE

 

SECTORS

Percentage of Cos Yet to Report

Q2 YoY SmartEstimate Growth

Q3 Revision Mean Chg.. -30d

 

Q3 Revision Mean Chg. -30d

Q2 YoY SmartEstimate Growth

Energy (5)

100%

148.8%

-0.6%

25.9%

-1.6%

Materials (4)

100%

701.5%

0.8%

7.6%

0.3%

Industrials (3)

100%

27.9%

0.2%

4.9%

3.2%

Consumer Discretionary (5)

100%

52.1%