S&P 500: Wall Street lowers profit forecast - analysis by financial experts shows optimistic revisions for 2024.

S&P 500: Wall Street lowers profit forecast - analysis by financial experts shows optimistic revisions for 2024.

According to a report by finanzmarktwelt.de,

The article reports that analysts on Wall Street are significantly lowering their outlook for American companies, even though the US leading index S&P 500 has recently risen significantly. The decline in future earnings expectations is particularly severe, with the largest annual decline expected since the Great Recession. This decline is also particularly pronounced compared to the pandemic era.

According to the article, analysts are skeptical as companies grapple with rising labor costs, rising commodity prices, rising borrowing rates and rising geopolitical tensions that show no signs of abating. This could have a negative impact on the economy and the financial sector.

Despite this, 82% of S&P 500 members have so far exceeded analysts' earnings expectations. This suggests a mismatch between the results and the outlook, causing analysts to be cautious about buying recommendations. Uncertainty about the economic environment, inflation risks, the upcoming US presidential election and geopolitical tensions could increase pressure on central banks.

Although 2024 earnings forecasts have been raised 1.4% since the start of the reporting season, general skepticism remains. The lowering of analyst praise and Wall Street's cautious stance could trigger increased concern and increased volatility among investors.

Company executives are taking the opinions of Wall Street research firms very seriously and it could lead to a change in their decision-making processes. But contrary to expectations, analysts and research firms play a cautious role and rate only 5.3% of S&P 500 stocks as “Sell”, while 55% are Buy recommendations and 39% are “Hold”.

Overall, analysts' outlook suggests that the economic situation and the financial industry are facing significant challenges that could impact the market and investment decisions in the near future. This could lead to cautious sentiment among investors and increase volatility in financial markets.