Equities: Earnings beats seen versus consensus – Deutsche Bank

Deutsche Bank strategists, highlight the start of the United States (US) Q3 earnings season with major banks reporting. They expect S&P 500 earnings growth to stay at a record 34% year-on-year in Q3, well above the 27% consensus, arguing consensus embeds too much slowdown and leaves room for above-average earnings beats.

Strategists see strong Q3 earnings

"Financials are actually expected to be one of the sectors with the weakest YoY growth so be aware of that as you digest today's results. Overall, our US equity strategists expect S&P 500 earnings growth to remain at a record 34% YoY in Q3, versus consensus at 27%. Their view is that consensus is again embedding too much of a slowdown, leaving scope for another quarter of above-average beats."

"So it should be a very strong earnings season on both sides of the Atlantic and indeed across the globe."

"US equity gains were ultimately reversed by the continued selloff in chip stocks, with the Philly semiconductor index down -2.67%. That said, two-thirds of the index were higher with the Mag-7 closing up +0.47%."

"To the day ahead now, and as discussed near the top, earnings releases include JPMorgan, Wells Fargo, Goldman Sachs and Citigroup. Data releases from the US include the NFIB’s small business optimism index for September, along with existing home sales. Finally, the Fed’s Waller, Barkin and Collins will speak today."

"Before the late US equity dip and the overnight Asia sell-off, all the major European indices ended higher on the day even with gas prices notably higher. That included the Stoxx 600 (+0.65%) and the DAX (+0.76%), whilst France’s CAC 40 (+0.38%) still saw a rise, even though it underperformed."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)