Investors are preparing to use data on the season of corporate reporting of the first economy in the world for profit. US companies will begin to publish their earnings reports for the third quarter of this week and analysts are not very optimistic about this.
Even more, market experts believe that this data will be the worst for the entire year, when it comes to revenue growth. On average, prices per share are expected to rise at 3.8%, well below the double-digit forecasts made in past quarters.
The last two reporting seasons helped the Trump rally stay afloat. However, changes are ahead and US stock indexes may soon begin a downward correction if the numbers do not satisfy market participants.
Speaking only of the components of the S & P 500, the average value of 73% exceeded earnings expectations. Some key players in the banking sector showed very confident results.
Banking stocks will be the focus of attention this week, because Big-name banks such as Bank of America, Citigroup and JPMorgan will publish their financial statements.
However, analysts’ forecasts do not look so promising. The banking sector is expected to decline by an average of 6% over the past 3 months.
Of course, if the results are above expectations, it will strongly support stock markets, pushing major indices to new record highs (this is one of the possible scenarios).
JPMorgan Chase & Co. will publish its report on Thursday before the close of the exchange. Zacks ’Earnings ESP (Expected Surprise Prediction) is at -0.53%.
Citibank Inc. will also publish a report on earnings for the third quarter of this session. Earnings ESP indicates a value of -0.29%.
On Friday, all attention will be focused on reports of Bank of America Corp. and Wells Fargo & Company, with an Earnings ESP of -0.66 and 0.03, respectively.