Review the latest Weekly Headings by CIO Larry Adam.
Good news – the earnings recession is over! After three consecutive quarters of negative earnings growth, 3Q S&P 500 earnings are on pace to climb 5% YoY. If sustained, this would be the best quarter of earnings growth since 2Q22. For the most part, 3Q’s earnings results have been relatively solid. The magnitude of earnings beats (~80%) and the number of positive earnings surprises (~7%) this quarter have come in above their ten-year averages. However, sales results have been less than stellar. While next week brings the “unofficial end” to 3Q earnings season, all eyes will be on several big retailers (i.e., Walmart, Target and Home Depot) for insights into the health of the consumer, guidance on the upcoming holiday shopping season and whether retailers are still destocking inventories. With the earnings season drawing to a close, here are five key takeaways:
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