The initial earnings results of this reporting period are beating expectations b...
NEW YORK - The initial earnings results of this reporting period are beating expectations by a wide margin, suggesting to some investors that the S&P 500 may be able to avoid a so-called “profit recession” this year because predicted economic bad news has failed to materialize.
The quarter could be the trough for “this mini down cycle,” said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta. “The market is now expecting to see earnings stabilize. Eventually, if the global story gets better as we expect, earnings will help propel the market higher later this year.”
The average earnings surprise for an entire earnings period since 1994 is 3.2%, based on Refinitiv’s data. To be sure, the earnings season is just getting going, and corporate earnings face a number a headwinds: costs are rising because of tensions with U.S. trading partners, a stronger dollar diminishes the value of overseas sales, and technology companies in aggregate are looking at a likely profit decline in the first quarter.
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