Watch Earnings – Are US Stocks Still The Best Destination For Investors?
(2 min read)
US Q3 earnings season has now started. JP Morgan and Citi have beaten expectations, while Goldman Sachs has disappointed. We’ll also see Netflix, IBM and Coca-Cola reporting this week. With US stocks down over the past three months, broad positive earnings surprises would be welcome. Companies have been guiding the market lower with EPS for Q3 expected to be lower than Q2. So the bar for positive surprises is quite low, right?
In fact, the ability for US companies to engineer positive surprises is impressive. In the 1990s, only a net 20% of US companies reported positive surprises. In the 2000s, this figure rose to 45%. And this decade, 50% of companies reported positive surprises over those that reported negative surprises. Given this bias, we’d need to see a very significant proportion of US companies reporting positive surprises for it to move US stocks higher...
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