The third-quarter corporate earnings season is almost upon us, unofficially kicking off with aluminium producer Alcoa’s report next Monday.

Ahead of the Federal Reserve’s expected interest rate increase in December, and the US presidential election in November, the market has the chance to focus on the microeconomic fundamentals.

According to Thomson Reuters, analysts reckon the aggregate Q3 2016 earnings-per-share growth for the S&P 500 will be minus 0.5 per cent.

At the start of the year, analysts forecast that EPS growth would be 8.3 per cent in Q3, and it’s not hard to see what has done the most damage to those expectations.

At the start of the year the energy sector EPS was seen falling 8.8 per cent. Now analysts think it will contract 66 per cent because oil prices — even though they have just picked up of late — were generally lower than hoped for.

Top performer for Q3 is expected to be the materials sector, registering EPS expansion of 6.8 per cent.

Healthcare is forecast to grow 5.6 per cent and technology to gain 4.4 per cent.

But the group whose performance may arguably most determine how the earnings season is perceived is the financial sector.

With all their regulatory travails, financials are seen expanding EPS by just 1.1 per cent. Beatable?

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