April-June financial report preview of US stocks
2023-07-17
■ Is the result of EPS significantly exceeding market expectations in the quarter from January to March reproduced?
■ Pay attention to the earnings releases of high-tech giants and semiconductor giants.
Starting from the financial giants on July 14, the April-June financial reports of major companies were officially announced in the United States. Before the climax of the first week of August, seven companies including electric vehicle giants (July 19), four high-tech giants (July 25-27), and smartphone giants (August 3) will be in the Six of the large high-tech companies known as the "Magnificent Seven" with concentrated capital in the U.S. stock market have released financial reports, and the two semiconductor giants (July 27 and August 1) should not be missed. After that, high-profile companies such as the three retail giants (August 15-16) and the remaining one of the Magnificent Seven semiconductor giants (August 23) are expected to report earnings, and the US stock market will now be in the middle of management's assessment of individual companies. The content of the settlement and the release of information on the future business environment are mixed.
According to the financial intelligence firm (as of July 7), the April-June earnings per share (EPS) of S&P500 constituent companies fell by 6.4% year-on-year, down from early April (down 3.9% year-on-year). From the beginning of the quarter to the end of the quarter, there is generally a downward trend in the expected EPS reduction, but the downward adjustment is only slightly lower than that in the past three quarters, and most of the downward adjustments will end before the first ten days of May. In the pre-announcement (guidance) of the EPS of each company, 39 cases were positively guided and 62 cases were negatively guided, maintaining a cautious attitude towards earnings forecasts. A 5.1% year-on-year decline was expected in early January, but ultimately it will be interesting to see whether the January-March quarter results, which have been revised up sharply to market estimates for a 0.1% year-on-year increase, will be repeated.
In terms of the market, the EPS of the S&P500 has turned from the bottom to the growth tone in the April-June quarter. It is expected that the October-December quarter will grow by 9.3% year-on-year, a rapid recovery, and will grow by 7.6% in the next year. Due to factors such as earnings expectations against the backdrop of increased demand related to artificial intelligence (AI) and the fact that the US Federal Reserve (Fed) believes that there is little room left to raise interest rates, the S&P500's expected stock price return (PER) is 19.1 times, reaching an upcoming level. The highest level since February 2020 after the outbreak of the novel coronavirus. As long as corporate performance forecasts with an optimistic impression in comparison with the economic outlook cannot be supported by earnings releases, etc., the room for stock price increases should be considered limited.
■ Pay attention to the earnings releases of high-tech giants and semiconductor giants.
Starting from the financial giants on July 14, the April-June financial reports of major companies were officially announced in the United States. Before the climax of the first week of August, seven companies including electric vehicle giants (July 19), four high-tech giants (July 25-27), and smartphone giants (August 3) will be in the Six of the large high-tech companies known as the "Magnificent Seven" with concentrated capital in the U.S. stock market have released financial reports, and the two semiconductor giants (July 27 and August 1) should not be missed. After that, high-profile companies such as the three retail giants (August 15-16) and the remaining one of the Magnificent Seven semiconductor giants (August 23) are expected to report earnings, and the US stock market will now be in the middle of management's assessment of individual companies. The content of the settlement and the release of information on the future business environment are mixed.
According to the financial intelligence firm (as of July 7), the April-June earnings per share (EPS) of S&P500 constituent companies fell by 6.4% year-on-year, down from early April (down 3.9% year-on-year). From the beginning of the quarter to the end of the quarter, there is generally a downward trend in the expected EPS reduction, but the downward adjustment is only slightly lower than that in the past three quarters, and most of the downward adjustments will end before the first ten days of May. In the pre-announcement (guidance) of the EPS of each company, 39 cases were positively guided and 62 cases were negatively guided, maintaining a cautious attitude towards earnings forecasts. A 5.1% year-on-year decline was expected in early January, but ultimately it will be interesting to see whether the January-March quarter results, which have been revised up sharply to market estimates for a 0.1% year-on-year increase, will be repeated.
In terms of the market, the EPS of the S&P500 has turned from the bottom to the growth tone in the April-June quarter. It is expected that the October-December quarter will grow by 9.3% year-on-year, a rapid recovery, and will grow by 7.6% in the next year. Due to factors such as earnings expectations against the backdrop of increased demand related to artificial intelligence (AI) and the fact that the US Federal Reserve (Fed) believes that there is little room left to raise interest rates, the S&P500's expected stock price return (PER) is 19.1 times, reaching an upcoming level. The highest level since February 2020 after the outbreak of the novel coronavirus. As long as corporate performance forecasts with an optimistic impression in comparison with the economic outlook cannot be supported by earnings releases, etc., the room for stock price increases should be considered limited.