US Stock Market: What to Expect from Earnings Season? Analysis by financial experts

US Stock Market: What to Expect from Earnings Season? Analysis by financial experts

According to a report by www.xtb.com, financial experts are predicting an exciting earnings season on Wall Street in Q2 2023. The US stock market is expected to witness interesting developments in July and August due to the earnings season. In particular, the banking sector's results will influence a possible revision of the Fed's tightening policy.

The Q2 2023 results reported by some companies so far are encouraging as they have beaten estimates by 3% on average. According to forecasts, the net income of S&P 500 companies is expected to rise 0.3% year-on-year in the third quarter. The results will therefore likely mark the third consecutive quarter in which net income declined year-over-year.

The banking sector's results will be watched particularly closely in the coming weeks. The major banks' earnings season is expected to rise 13.2%. However, higher revenues may not automatically translate into higher profits as profit margins are limited and banks face certain challenges.

The technology sector is also being closely watched as high valuations and the concentration of profits in a few large companies make the sector vulnerable to investor disappointment. Expectations are high for companies like Alphabet, Microsoft and Nvidia, and results will have to show whether they can live up to them.

Overall, earnings season is crucial to market sentiment for the second half of the year and is closely followed by investors and financial experts. The results could have a significant impact on the further development of the US stock market.