The Wall Street analysts who follow companies in the S&P 500 index
SPX
tend to be an upbeat bunch, but as second-quarter earnings reporting season winds down, are they too upbeat on the months ahead? A JPMorgan strategist last week said yes. “Earnings estimates appear too optimistic,” JPMorgan chief global market strategist Marko Kolanovic and others said in a note Monday.
JPMorgan cited second-quarter profit growth that largely failed to impress, along with “less upbeat” financial outlooks. They also pointed to greater pressure on profit margins as customers take fewer risks on spending. They also said next year’s profit growth wasn’t looking very good either, as the Federal Reserve pushes up borrowing costs, consumer savings dwindle and economies overseas stumble. “The consensus 2024 EPS growth rate of 12% appears too optimistic given an aging business cycle with very restrictive monetary policy, still rising cost of capital, lapping of very easy fiscal policy, eroding consumer savings and household liquidity, low unemployment rate, and increasing risk of a recession for some of the largest economies abroad (e.g., China, Germany),” Kolanovic said. He made that assessment as some economists shrug off concerns of a downturn or otherwise soften or fine-tune the language they use to describe the economy’s path ahead, be it a hard landing, a soft landing or something with lighter bumps in between. However, consumers con …
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SPX
tend to be an upbeat bunch, but as second-quarter earnings reporting season winds down, are they too upbeat on the months ahead? A JPMorgan strategist last week said yes. “Earnings estimates appear too optimistic,” JPMorgan chief global market strategist Marko Kolanovic and others said in a note Monday.
JPMorgan cited second-quarter profit growth that largely failed to impress, along with “less upbeat” financial outlooks. They also pointed to greater pressure on profit margins as customers take fewer risks on spending. They also said next year’s profit growth wasn’t looking very good either, as the Federal Reserve pushes up borrowing costs, consumer savings dwindle and economies overseas stumble. “The consensus 2024 EPS growth rate of 12% appears too optimistic given an aging business cycle with very restrictive monetary policy, still rising cost of capital, lapping of very easy fiscal policy, eroding consumer savings and household liquidity, low unemployment rate, and increasing risk of a recession for some of the largest economies abroad (e.g., China, Germany),” Kolanovic said. He made that assessment as some economists shrug off concerns of a downturn or otherwise soften or fine-tune the language they use to describe the economy’s path ahead, be it a hard landing, a soft landing or something with lighter bumps in between. However, consumers con …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]