Q-3 Earnings Season Looks Bumpy Ahead
$GS, $DXY, $OIL
The US Q-3 earnings season kicks off on 12 October, and Wall Street is starting to place its bets.
I expects a bumpy reporting frame.
Companies representing more than a 20% of the S&P 500’s market value will report Q-3 earnings results during the 3 day period from 21 to 23 October alone.
Continued uncertainty in China and the emerging markets will combine with the slump in Crude Oil and the higher USD to make this earnings season an interesting.
Based on these factors, the investments banks says it is going into the reporting period with an overweight on information technology and financials and an underweight on consumer staples, energy, utilities, and materials.
Goldman’s (NYSE:GS) analysts expect profit margins to fall a collective 21 bpts to 9%.
Looking at that data, telecom services and healthcare are expected to post the best sales growth while consumer staples, materials and energy are forecast to see earnings and revenues decline Vs the same period last year.
Based on recent and current stock market action participants are favoring domestic-facing, high quality stocks, and have less favorable outlooks for companies leveraged to economic growth and international sales.
Stay tuned…
HeffX-LTN
Paul Ebeling
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