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The third quarter reporting season: What investors should pay attention to now.
Dear readers, the event of the previous week was of course the Fed meeting, which has led to noticeable price losses since Wednesday. And although important inflation data will be published again this week, which can also influence the Fed's monetary policy, stock market investors are now likely to focus on another topic - the quarterly reporting season. The third quarter reporting season is considered the most important of the year because of two reasons. Firstly, companies must now clarify whether they are able to achieve their annual targets. Secondly, many companies are already giving an outlook for the following year. This information will help investors...
The third quarter reporting season: What investors should pay attention to now.
Dear readers,
The previous week's event was of course the Fed meeting, which has led to noticeable price losses since Wednesday. And although important inflation data will be published again this week, which can also influence the Fed's monetary policy, stock market investors are now likely to focus on another topic - the quarterly reporting season.
The third quarter reporting season is considered the most important of the year because of two reasons. Firstly, companies must now clarify whether they are able to achieve their annual targets. Secondly, many companies are already giving an outlook for the following year. This information helps investors adjust their strategies and reallocate their portfolios.
The upcoming earnings season is expected to have a lot of impact on the market. The analysts' previous forecasts will be confronted with the actual company figures and could therefore be overturned. Investors will adjust their portfolios accordingly, which may cause stock prices to fluctuate. This could also have an impact on the typical period of weakness on the stock markets in autumn.
Regarding earnings estimates for the third quarter, analysts expect a slight decline in profits. However, it is expected that profits will rise again from the 4th quarter onwards and will therefore also have a positive impact on the annual comparison rates. Current estimates could therefore end up being exceeded as companies often exceed their expectations.
Earnings estimates are overall positive, while prices have fallen over this period. This has also reduced the overvaluation of the market somewhat. With a price-to-earnings ratio (P/E) of 18, the S&P 500 is still above the average of the last 10 years. However, further improvement in earnings estimates due to better-than-expected earnings season results could bring the valuation into a fair range.
Overall, market conditions could improve and investors could bet on further improvement. This could mark the start of the year-end rally that usually follows the seasonally weak period in the stock market.
According to a report by www.ad-hoc-news.de
Read the source article at www.ad-hoc-news.de