Goldman Sachs The Markets Will earnings boost US stocks?
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Oct 25, 2024 
Mike Washington, an equity sales trader at Goldman Sachs, shares his keen insights on the current earnings season and its impact on U.S. markets. Investors' reactions to earnings reports reveal key trends across sectors, especially amidst rising interest rates. Washington emphasizes challenges faced by banks and consumer sectors while highlighting growth opportunities in semiconductors and utilities. There’s a refreshing perspective on mega-cap tech earnings, reflecting cautious optimism as investor sentiment shifts, making it an engaging discussion for market watchers.
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Q3 Earnings Overview
- Expectations for Q3 earnings were lower than previous quarters, with a focus on corporate spending, AI, and consumer health.
- Despite some disappointments, results have been generally positive, exceeding the lowered expectations.
Sector Performance
- Banks reported positive earnings, conveying a soft landing narrative and better-than-expected NII trajectory.
- Consumer discretionary spending highlighted challenges, especially among high-end consumers, while housing and rate-sensitive sectors faced pressure.
Rising Yields
- The rise in 10-year yields despite the Fed's rate cut is puzzling and likely due to several factors.
- These factors include hawkish commentary, budget concerns, systematic selling, and strong economic data like NFP and CPI.