Goldman Sachs The Markets
Will earnings boost US stocks?
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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Quick takeaways
- Mixed earnings results have influenced market sentiment, with strong performances in the financial sector contrasting challenges in consumer discretionary.
- Rising interest rates might indicate confidence in economic growth but could also signal inflationary pressures negatively affecting equity markets.
Deep dives
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.
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