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Corporate Profits

Essentials
The Indian Stock Rally Is Running On Fumes
Our colleagues from the Emerging Markets Strategy team argue that investors should brace for a significant correction in Indian stocks in the coming months. They posit that the pillar of Indian corporations' sustained profit growth — surging revenues — is…
2 years ago
Essentials
What To Watch For In SIFI Bank Earnings
Second-quarter earnings season unofficially kicks off before the open on Friday, when Citigroup (C), JPMorgan (JPM) and Wells Fargo (WFC) report their results for the June 30 quarter. Bank of America (BAC), the other commercial banking behemoth, will round…
2 years ago
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CoreMacro
Third Quarter 2024 Strategy Outlook: Here Comes The Pain

The consensus soft-landing narrative is wrong. The US will fall into a recession in late 2024 or early 2025. We were tactically bullish on stocks most of last year, turned neutral earlier this year, and are going underweight today. We conservatively expect the S&P 500 to drop to 3750 during the coming recession.

Peter Berezin
2 years ago
GlobalChina
Essentials
China: Cyclical Outlook Remains Downbeat
As in many other countries, China’s cyclical consumption growth is primarily driven by labor market conditions, income, and borrowing. BCA Research’s China Investment Strategy service maintains the view that these three aspects will not meaningfully improve…
2 years ago
Essentials
Excess Liquidity Phenomenon Also Affects European Markets
According to BCA Research’s European Investment Strategy service, the money sloshing around the financial system from pandemic-era stimulus measures disconnects near-term prospects for growth from risk asset prices. As a result, we are witnessing an odd…
2 years ago
Essentials
Chinese Industrial Profits Growth Not Symptomatic Of Brighter Outlook
Chinese industrial profits rose by 4.0% y/y in April, from a 3.5% y/y contraction in March. They grew by 4.3% in the first four months of the year, compared to the same period in 2023. In March, the central government pledged funds to incentivize…
2 years ago
Essentials
Earnings Guidance Leaves Room For Downward Surprises
The Q1 2024 earnings season is drawing to a close with 93% of S&P 500 companies having reported results as we go to press. Three-quarters (two-thirds) of companies have topped earnings (sales) expectations in Q1, according to Factset. Next quarter’s…
2 years ago
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Equities
Recap Of Q1-24 Earnings: Looking Ahead

Q1 Earnings and sales growth were strong, but the devil is in the details: Without the Magnificent Five, earnings growth for the index would have been negative. On a positive note, margins have stabilized, and earnings growth is expected to broaden into yearend. Companies are optimistic about the economy. Development of AI applications is in full swing, but few companies are monetizing them yet. Consumer spending is strong but is slowing. We reiterate our underweight of consumer sectors, and overweight of Software and Services as the “don’t fight AI” adage holds.

Irene Tunkel
2 years ago
US EquitiesAI
Essentials
Even Mild Recessions Lead To Bear Markets
An adverse shock is not a recession prerequisite. The empirical record shows that the US economy regularly evolves its way into a contraction with little fanfare. If current cooling trends continue, we project a recession will begin in late 2024/early 2025. …
2 years ago
Essentials
Is Health Care Set To Outperform?
Health care stocks have underperformed the US broad market by over 20% since the beginning of 2023. Indeed, vaccination campaigns during the pandemic years had initially boosted health care companies’ earnings. However, this tailwind eventually faded.…
2 years ago

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