Poll: What Are the Expectations for Third-Quarter Earnings?
Entering the third-quarter earnings season, the world finds itself suffering high levels of uncertainty amid simmering geopolitical crises in Ukraine, the Middle East, and Hong Kong. Further, many major economies, such as the EU, the United States, and Japan, are seeing declining business and consumer confidence as well as increasing income inequality. China too is seeing a slowdown in its residential housing.
In other words, global corporate earnings have a backdrop of worry. Yet when we asked CFA Institute Financial NewsBrief readers, 43% of respondents indicated they believe businesses will meet earnings expectations. For those thinking that profits will deviate from expectations, respondents believe corporations are likely to outperform those that underperform by 2.35 to 1 (40%: 17%).
Earnings for the quarter that ended Sept. 30 will:
Investors are confident of a good earnings season, and perhaps the profit picture of global business will ameliorate some of the economic doubts. Yet even if businesses deliver, it seems that the corporate earnings season and its gyrations have diminished in importance since 2008–2009. Instead, the market drivers will most likely be interest rates and geopolitical predictions.
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