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Wall Street stock markets: profit forecasts too high - financial experts warn of risks
According to a report from finanzmarktwelt.de, Wall Street has been going downwards since mid-July. The broad S&P 500 index has since lost from around 4,600 to 4,100 points. Strategists Mike Wilson from Morgan Stanley and Marko Kolanovic from JPMorgan have already pointed out several times that profit forecasts have become decoupled from risks. They remain pessimistic for the coming quarters. Kolanovic also warns that Wall Street's expectations for double-digit profit growth in the coming quarters will have to be revised downwards. The first corrections to the profit forecasts have already arrived. Deutsche Bank cut analyst estimates for...
Wall Street stock markets: profit forecasts too high - financial experts warn of risks
According to a report from finanzmarktwelt.de, Wall Street has been going downwards since mid-July. The broad S&P 500 index has since lost from around 4,600 to 4,100 points. Strategists Mike Wilson from Morgan Stanley and Marko Kolanovic from JPMorgan have already pointed out several times that profit forecasts have become decoupled from risks. They remain pessimistic for the coming quarters. Kolanovic also warns that Wall Street's expectations for double-digit profit growth in the coming quarters will have to be revised downwards. The first corrections to the profit forecasts have already arrived. Deutsche Bank cut analysts' estimates for the fourth quarter by a "more than typical" 1.9%.
The continued underperformance of small-cap stocks, weakening investor sentiment surveys and the decoupling of gold prices from bond yields reflect increasing investor caution, according to Kolanovic. Lori Calvasina, a strategist at RBC Capital Markets, also noted the "strikingly" pessimistic tone from company executives in post-earnings conference calls in the current earnings season.
The impact of these developments on the market and the financial industry can be significant. A sustained correction on Wall Street could lead to further declines and weaken consumer and business confidence. The strategists' pessimistic profit forecasts underline the uncertainty and could lead to caution when investing.
Additionally, weaker results from tech heavyweights like Alphabet and Meta Platforms could have a negative impact on the tech sector. Apple's earnings this week will also be very important.
Investors and analysts must closely monitor current developments and adjust their forecasts accordingly. The risks of restrictive monetary policy, declining confidence and increased geopolitical risks should not be underestimated.
Source: According to a report from finanzmarktwelt.de
Read the source article at finanzmarktwelt.de