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    S&P 500 expected to deliver modest earnings growth in Q3

    By Kyle Rodda

    12:40, 11 October 2024

    Earnings growth across the S&P 500 is expected to be modest for Q3, with analysts revising EPS expectations throughout the quarter. According to the latest FactSet data, EPS is tipped to grow by 4.2%, down from 7.8% at the end of Q2 and lower than the 11.2% delivered during that quarter.

    Information technology, health care and communication services, many of which have benefited from the artificial intelligence boom, are tipped to drive earnings growth for the period, with IT forecast to deliver 15% EPS growth year-over-year. Cyclical sectors are forecast to underperform, especially commodity sensitive materials and energy stocks – the latter is tipped to see a nearly 21% contraction in earnings growth.

    The financial sector will be in focus this week, with a series of America’s largest banks handing down results. As a whole, the sector is tipped to reveal practically flat earnings growth. Market participants will peruse the results of the banks for clues about economic growth, credit demand, financial markets activity and financial stress amongst businesses and households.

    Source: FactSet

    Key companies to watch in the week ahead

    1. Friday, October 11
      • JP Morgan Chase & Co. (JPM), Est. EPS $4.02
      • Wells Fargo & Company (WFC), Est. EPS $1.27
    2. Tuesday, October 15
      • UnitedHealth Group (UNH), Est. EPS $7.02
      • Johnson & Johnson (JNJ), Est. EPS $2.19
      • Bank of America Corporation, Est. EPS $0.78
      • Goldman Sachs Group, Inc (GS), Est. EPS $6.96
      • Citigroup (C), Est. EPS $1.36
    3. Thursday, October 17
      • Taiwan Semiconductor Manufacturing Company (TSM), Est. EPS $1.74
      • Netflix, Inc. (NFLX), Est. EPS $5.07
      • Morgan Stanley (MS), Est. EPS $1.25

    S&P 500 extends bull-run to fresh record highs

    The S&P 500 continues to press to new record highs off the back of interest rate cuts and data pointing to resilient demand in the economy. Given expectations for lukewarm earnings, the markets will be searching for clues about whether companies expect robust economic fundamentals to feed through to corporate profits.

    J225

    39,049.90 Price
    -1.020% 1D Chg, %
    Long position overnight fee -0.0117%
    Short position overnight fee -0.0106%
    Overnight fee time 21:00 (UTC)
    Spread 10.0

    HK50

    20,276.00 Price
    -0.700% 1D Chg, %
    Long position overnight fee -0.0228%
    Short position overnight fee 0.0009%
    Overnight fee time 21:00 (UTC)
    Spread 5.0

    US500

    5,845.00 Price
    +0.110% 1D Chg, %
    Long position overnight fee -0.0249%
    Short position overnight fee 0.0027%
    Overnight fee time 21:00 (UTC)
    Spread 0.5

    US100

    20,212.40 Price
    +0.310% 1D Chg, %
    Long position overnight fee -0.0249%
    Short position overnight fee 0.0027%
    Overnight fee time 21:00 (UTC)
    Spread 1.8

    From a technical standpoint, new record highs clearly point to a bullish market. Having pushed through technical resistance at previous record highs around 5770, the market is probing clear-air, with some possible resistance at an upward sloping trendline. Meanwhile, support could be found around previous resistance at 5770 and a confluence of levels around 5670.

    Source: Trading View

    Past performance is not a reliable indicator of future results

    References

    Related topics

    #S&P 500 (US500) #Economics #Economic news

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    The difference between trading assets and CFDs
    The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
    You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
    CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
    CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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