Jan 19, 2024: JPMorgan equity strategists have observed subdued results and cautious forward guidance during the ongoing fourth-quarter earnings season for S&P 500 companies. Early reporting from about 6% of companies, primarily in the banking, consumer, and industrial sectors, shows that 66% of them exceeded earnings expectations. However, concerns arise as only 50% are surpassing revenue projections, and stocks are experiencing underperformance after earnings announcements. JPMorgan emphasizes challenges for consumer-focused companies, including diminishing household savings and liquidity concerns, as well as risks associated with slowing growth in Asia/China for global consumer brands.
The strategists suggest that the stock market is facing a high bar during this earnings season, and anything short of strong corporate guidance reaffirming current high growth expectations is likely to be penalized.
