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Goldman Sachs and Netflix Earnings Eyed as S&P 500 Faces “Actuality Examine”


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S&P 500 FORECAST: BULLISH

  • The S&P 500 index is hovering close to all-time highs as earnings season arrives
  • Analysts are anticipating a 22% YoY earnings progress price for the broader market in This autumn
  • Goldman Sachs, Financial institution of America, Morgan Stanley and Netflix outcomes are in focus this week

The Dow Jones, S&P 500 and Nasdaq 100 indices consolidated in the beginning of 2022, weighed by the speedy unfold of the Omicron variant of Covid-19 and expectations that the Fed might kick off a rate-hiking cycle as early as March. A number of Fed members expressed hawkish-biased views lately, supporting the narrative of three to 4 price hikes this 12 months after December’s inflation studying reached a four-decade excessive of seven%.

Although this has dampened urge for food for the know-how shares, the monetary sector has outperformed. Huge banks are more likely to profit from widening rate of interest margins and a broad restoration within the economic system. Whereas the Nasdaq 100 index has been range-bound over the previous 4 weeks, the S&P index of regional banks soared 16% (chart under). This rally may stick with it if huge banks corresponding to Goldman Sachs and Financial institution of America ship optimistic earnings surprises subsequent week.

NASDAQ 100 V S&P Bank Index

Supply: Bloomberg, DailyFX

In accordance with Factset, the S&P 500 is predicted to ship a broad earnings progress price of 21.8% YoY for the fourth quarter, marking the fourth straight quarter of earnings progress above 20%. The precise progress price may very well be even larger as nearly all of company America tends to offer conservative EPS forecasts in an try to engineer optimistic surprises when realized outcomes are revealed. Larger EPS readings might successfully carry down the price-to-earnings (PE) ratio for the S&P 500 index, paving the way in which for it to drive deeper into report territory.

Huge corporates corresponding to Goldman Sachs, Procter & Gamble, Financial institution of America, Morgan Stanley and Netflix will begin to launch their leads to the week forward. Here’s a transient preview:

Main US Earnings EPS Forecast – Week 17-21 Jan

Major US Earnings EPS Forecast

Supply: Bloomberg, DailyFX

Goldman Sachs:

  • EPS of $11.65 and income of $12 billion anticipated for This autumn
  • Robust funding banking and buying and selling charges anticipated in opposition to the backdrop of sturdy quantity and buying and selling exercise
  • Aggressive power might gasoline a stable begin to 2022 for the institutional phase
  • Income anticipated to be up 2% YoY, EPS might fall 4%

Financial institution of America:

  • EPS of $0.755 and income of $22.23 billion anticipated for This autumn
  • Potential price hikes might enhance ahead steering to its internet curiosity earnings outlook for 2022
  • Administration has been optimistic on balances in latest weeks
  • Buying and selling and funding banking charges needs to be stable

Morgan Stanley:

  • EPS of $1.939 and income of $14.44 billion anticipated for This autumn
  • Rising asset costs ought to have bolstered wealth and asset administration enterprise
  • Institutional income progress needs to be pushed by strong advisory income

Netflix:

  • EPS of $0.894 and income of $7.71 billion anticipated for This autumn
  • Inventory worth could also be lifted if new subscribers surpass the corporate’s steering of 8.5 million
  • The corporate might attain its objective of 18.Four million new customers for the complete 12 months
  • The corporate expects free money move to interrupt even

Keep tuned for extra earnings within the weeks to come back:

Q4 2021 US Earnings Breakdown

Supply: Bloomberg, DailyFX

— Written by Margaret Yang, Strategist for DailyFX.com To contact Margaret, use the Feedback part under or @margaretyjy on Twitter





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