Inflation and the global market, expectations are growing for German industrial production data
After a whole February of corrections, the S&P 500 go back to register purchases. There market strength manifested itself despite the returns of obligations US ten-year bonds have reached 4% and theEuropean inflation increased more than expected. In that scenario, it turns out anyway premature toast to optimism. It is wiser to remain cautious.
In fact, it is not only a macroeconomic issue that generates uncertainty. By now 99% of the S&P 500 companies have lifted the veils on the accounts of the fourth quarter 2022 and the results were hardly supportive. Although the markets were already expecting a first quarter of declining profitsit is now the downward revisions for the coming quarters that are causing concern.
For the first quarter of 2023, analysts expect a new growth slowdown, with profits down 5.9%, compared to -0.3% at the end of the year. At the sectoral level, only the Utilities revise their forecasts upwards (although they are in negative territory) while the other ten sectors report a decrease in their estimates, led by the Materials (-12,6%), Health Care (-8,6%), Consumer Discretionary (-8,5%) e Industrials (-8,2%).
Overall, the earnings estimates they also fell substantially for the whole of 2023, going from around 4.6% at the end of the year to the current 2.1%. While this was a significant downward revision, with uncertainty stemming from the upward path of interest rates and a possible economic slowdown, the minimum profits process could represent a possible driver for a more sustainable market recovery.
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