{"id":1999293,"date":"2023-08-13T11:44:02","date_gmt":"2023-08-13T15:44:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/sluggish-us-earnings-may-need-pick-me-up-to-support-2023-stock-rally\/"},"modified":"2023-08-13T11:49:11","modified_gmt":"2023-08-13T15:49:11","slug":"sluggish-us-earnings-may-need-pick-me-up-to-support-2023-stock-rally","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/sluggish-us-earnings-may-need-pick-me-up-to-support-2023-stock-rally\/","title":{"rendered":"US earnings need a boost for 2023 stock rally."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fsluggish-us-earnings-may-need-pick-me-up-to-support-2023-stock-rally%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1999293&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"entry-content\">\n<p>By Lewis Krauskopf<\/p>\n<p><strong>NEW\u200d YORK (Reuters) \u2062-<\/strong> Stock \u200cinvestors have been satisfied by middling U.S. corporate results so far this year but they\u200c might not be so easy to please for the rest of 2023.<\/p>\n<div id=\"div-gpt-ad-1663871513696-art-1\" style=\"min-width: 320px; min-height: 50px;  text-align: center;\">  \t<script>  \t\tgoogletag.cmd.push(function() { googletag.display('div-gpt-ad-1663871513696-art-1'); });  \t<\/script>  <\/div>\n<div class=\"ad-slot__ad-label\">Advertisement<\/div>\n<\/p>\n<p>As the second-quarter earnings season winds down, \u200dS&#038;P 500 results are presenting a mixed picture, with companies beating analysts\u2019 profit expectations at the highest rate in nearly two years even as revenue beats dropped to the lowest since early\u200d 2020.<\/p>\n<p>Investors appear content\u2062 with that, \u200dfor now. The S&#038;P 500  has edged higher since earnings season began in July, with the \u200cbenchmark index up 16% in 2023. But expectations call for corporate profits to pick up as\u2064 the U.S. economy \u2062has so far defied recession fears, and investors may be far less\u2062 forgiving if companies fail to\u200b deliver later this year, given the jump in equity valuations.<\/p>\n<p>\u201cMarkets are \u200bexpecting earnings\u2062 to \u2026 deliver above and beyond where they have been,\u201d said Eric Freedman, chief investment \u200bofficer at U.S.\u200c Bank Asset Management. \u201cThis is a market that has moved up in anticipation of earnings that we have not quite gotten yet.\u201d<\/p>\n<p>Overall, \u2064second-quarter\u2062 earnings are\u2064 expected to have fallen 3.8% from a year earlier, Refinitiv IBES \u2063data showed. \u2062That decline follows a 0.1% rise in the first\u2063 quarter and a 3.2% drop \u200din the fourth quarter of last year. <\/p>\n<p>Results are expected to improve, \u200dhowever. Third-quarter S&#038;P 500 earnings are seen rising 1.3% on\u200b a year-over-year basis, according to Refinitiv, before\u2064 a 9.7%\u2064 fourth-quarter earnings \u2063rise and a 11.9% full-year \u200cincrease in \u200b2024.<\/p>\n<p>Meanwhile, the S&#038;P 500 has become more richly valued. The\u2064 index \u200bwas trading \u200cat 19.1 \u2063times forward 12-month earnings estimates as of Thursday, compared to its <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/inflation-signal-hits-new-record-high-in-ny-feds-manufacturing-survey\/\" title=\"Inflation Signal Hits New Record High in NY Fed's Manufacturing Survey\">long-term average<\/a> of 15.6\u200b times, according to\u2063 Refinitiv Datastream. The P\/E ratio ended 2022 at just below 17 times.<\/p>\n<p>This year\u2019s\u200c valuation expansion accounted for 86% of the S&#038;P 500\u2019s year-to-date return through July,\u200b with the rest of the market\u2019s boost coming \u2063from positive changes to earnings estimates,\u200d an analysis by Credit Suisse equity strategists showed.<\/p>\n<p>\u201cAt this point, \u200dvaluations have run ahead of the\u2062 fundamentals\u200d and so companies now have \u2064to prove that they can generate earnings growth,\u201d said Anthony Saglimbene, chief \u200cmarket strategist at Ameriprise Financial.<\/p>\n<p>Q2 RESULTS <\/p>\n<p>With 91% of S&#038;P 500 \u200bcompanies having reported second-quarter results, 78.7% posted earnings above analysts\u2019 \u2063expectations, \u200caccording to \u200bRefinitiv IBES. In aggregate, companies are reporting earnings\u200c 7.7% above\u2063 expectations, up from a long-term average of 4.1% above estimates.\u200d Both the beat rate and surprise\u200c factor are coming in at their highest rates since the third quarter of \u20622021.<\/p>\n<p>However,\u200b for revenue, only 62.9% of companies have topped\u200c expectations \u2013 the \u2063lowest beat rate since the first quarter of \u200c2020.<\/p>\n<p>Stock\u2062 reaction to earnings results has also \u200cbeen \u200dtepid, with <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/sluggish-us-earnings-may-need-pick-me-up-to-support-2023-stock-rally\/\" title=\"US earnings need a boost for 2023 stock rally.\">share prices posting \u2063weaker responses<\/a> to both beats and misses than \u2062the average over the past five years, analyst Julian Emanuel of Evercore ISI said. The average \u2064stock fell 0.6% after\u2064 results in the second quarter, Emanuel said in a note\u2062 on\u200c Thursday.<\/p>\n<p>\u201cWe went\u2064 from a market that is saying, \u2018Earnings had to back it \u200bup\u2019 to \u2018Thankfully earnings didn\u2019t screw\u2064 this up,&#8217;\u201d said John Lynch, chief investment \u200bofficer for Comerica Wealth Management. \u200b\u201cThat just gets \u2062us into a more expensive realm.\u201d<\/p>\n<p>Meanwhile, there have \u200calso been some high profile disappointments, with Apple shares dropping 4.8% after the iPhone\u200b maker\u2019s \u2062weak\u2064 sales forecast. Other megacap companies, such as Amazon and Alphabet, have seen a \u200dpositive\u200c investor response to their reports.<\/p>\n<p>Companies reporting results next week include key retailers, \u2063such as Walmart and Home \u2062Depot, while the release of monthly retail\u200b sales on Tuesday also could influence markets.    <\/p>\n<p>While investors generally have turned more positive about the\u2064 economic outlook, some still are wary of a \u200drecession stemming from the delayed impact of higher interest rates, as\u2063 indicators such as the Treasury\u200c yield \u2062curve are still <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/charles-gasparino-bond-market-is-flashing-warning-raise-interest-rates-or-well-do-it-for-you\/\" title=\"Charles Gasparino: Bond Market Is Flashing Warning: Raise Interest Rates or We\u2019ll Do It for You\">flashing warning signs<\/a>.\u200b  \u200b   \u2063Such a downturn \u2063could severely change \u200bthe prospects for \u2063corporate earnings and potentially\u2064 weigh on valuations. During recessions, earnings fall at a 24% annual rate on\u2062 average, according to Ned Davis Research.    \u200d\u201cThere is optimism,\u200c but I still wonder going into next year, are we too optimistic, from \u2063a consensus standpoint,\u201d said Comerica\u2019s Lynch. \u201cJust because we didn\u2019t have a\u2064 recession \u200cthis year, that \u2062yield curve continues to point to one.\u201d<\/p>\n<p>  (Reporting by Lewis Krauskopf; Editing by Ira \u200cIosebashvili and Richard Chang)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/uncategorized\/sluggish-us-earnings-may\/attachment\/file-photo-raindrops-hang-on-a-sign-for-wall-street-6\/\"><\/a><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>Since being removed from the\u2064 Fox News lineup, Tucker Carlson has held bombshell\u2064 interviews that have driven \u2062news\u200d cycles.<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>David Weiss becomes Special Counsel\u200d in the Hunter \u200bBiden probe, while Sam Bankman-Fried trades his mom\u2019s basement for a\u200b jail cell.<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>With less\u2064 than two weeks before the first GOP Presidential debate, media and political strategist Adam Weiss says it would be beneficial for Trump not to participate.<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>The lack of answers \u200bfrom the Biden Administration continues to cause frustration from families who\u2063 lost \u200bloved ones during the U.S. withdrawal from Afghanistan.<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>ERBIL (Reuters) &#8211;<\/strong> Iraq\u2019s telecoms ministry said it\u200c will lift \u200ca \u2063ban on the Telegram messaging app on Sunday, which was\u200b imposed earlier\u2026 \u200d <\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>NEW YORK (Reuters) &#8211;<\/strong> \u200dAustralia-listed investment firm \u200dGQG\u2062 Partners added \u200bmore shares of Nvidia Corp in the second quarter, ending June\u200d with\u2026\u2062 <\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>By Daniel Trotta EL CAJON, California (Reuters)\u2063 &#8211;<\/strong> California firefighters are using artificial intelligence to help spot wildfires, feeding video from \u200bmore\u2026 <\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>(Reuters) &#8211;<\/strong> \u200bThe U.S. \u200dSecurities \u200dand Exchange Commission (SEC) has delayed a decision on whether to approve Cathie Wood-led Ark Investment Management\u2019s\u2026 <\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>expectations but falling short on revenue. This trend could continue as economic growth slows and inflation concerns persist. Investors will likely become more discerning, demanding stronger performance from companies to justify high valuations. The remainder of 2023 may prove challenging for stock investors as they navigate uncertain market conditions.<\/p>\n","protected":false},"author":66,"featured_media":1999294,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[542],"tags":[],"class_list":["post-1999293","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-oann"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1999293","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1999293"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1999293\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1999294"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1999293"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1999293"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1999293"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}