Earnings Season Expectations and Outcomes

The current earnings season is characterized by relatively low expectations, particularly with consensus EPS growth projected to slow markedly compared to previous quarters. As companies report, mixed results have emerged, with some sectors performing well while others face disappointments. Notably, the financial sector has shown strong results, contributing to a soft landing narrative, which positively influenced market sentiment. In contrast, consumer discretionary sectors highlight ongoing challenges, particularly for the lower and middle-income consumers, while luxury brands also report a tougher economic climate.