A Spoonful of Earnings is What the Market Needs

Main content

Wide variations in sector returns have generally been the norm; this year information technology and healthcare are the leaders; energy and telecommunications are the laggards.

Consumer sentiment slipped a little in April because of worries over a trade war with China and the possibility of higher interest rates. However, the reading is still near multi decade highs due to strong employment and higher economic growth as the tax cuts weave their way through the economy. Meanwhile, earnings season is now underway and expectations are high at 18.6% growth. Some of the big banks reported this week and beat estimates, but investors don’t seem to be too impressed yet. Energy sector earnings are once again expected to post the highest year-over-year earnings growth and finally over the last month, have started to see some of the recognition they deserve. Every sector except real estate is forecasting double-digit earnings growth. A solid earnings season is just what this jumpy market needs to calm it down. Historically most market gains occur during earnings season. It’s not luck, it’s fundamentals. Fundamentals drive markets. Happy Friday the 13th and don’t forget to heed the words of Grouch Marx, "A black cat crossing your path signifies that the animal is going somewhere."

Please watch performance by sector on page 18 of the Global Perspectives Book.

Footer content