Corporate Profits
The recent decline in yields has powered European equities higher, however, this rally cannot last if earnings decline meaningfully. With this in mind, are our earnings models flagging risks for stocks next year?
According to BCA Research’s Global Asset Allocation service, recession is still on track to begin in the first half of 2024. Is it the recession that never came? Certainly, the consensus thinks so. Soft landing is now the clear mainstream view. Investment…
Chinese industrial profits for October delivered a pessimistic signal on Monday as the annual growth rate eased to 2.7% y/y. While the latest update marks the third consecutive month of profit growth, it is a sharp slowdown from 17.2% y/y and 11.9% y/y in…
The Q3 earnings season is coming to an end. By Friday, 481 companies in the S&P 500 index had reported earnings. In aggregate, the results are generally favorable. The share of companies whose earnings exceeded analyst expectations (81.9%) is above the…
The Q3 earnings season is nearing its end. By Friday, 92% of S&P 500 companies had already reported and thus far the results are positive. According to FactSet, the S&P 500's 4.1% y/y blended earnings growth rate is the first earnings expansion since…
China's CPI and PPI inflation release for October indicates that deflationary pressures continue to dominate the domestic economy. After remaining unchanged in September, consumer prices declined by 0.2% y/y last month, falling below consensus estimates of a…
The Magnificent Seven constitute 26.7% of the S&P 500 and are the cohort responsible for the majority of S&P 500 returns this year. Fundamentals, and, specifically, the profitability of the group are behind the strong performance. If we compare the…
Economic growth has little to no relationship with long-term country returns. But if GDP doesn’t drive long-term equity returns, then what does? To find out, we break down equity total returns of 33 countries from 1997 to 2022 into seven components. In line with other academic research, we find that, over our sample, net buybacks were a crucial factor for long-term country performance. Our research suggests that equity issuance is an underestimated driver of returns that investors should pay more attention to.
China's industrial profits delivered a positive signal over the past couple months. Total profits expanded on a year-on-year basis in both August (+17.2% y/y) and September (+11.9% y/y). Rebounding industrial profits is typically a favorable development for…
BCA Research’s US Investment Strategy service studied the SIFIs’ earnings calls for insights into borrower performance, lender willingness, liquidity and the actions and intentions of households and businesses. Nothing in the banks’ commentary…