US stock market: July-September quarterly financial report preview
2023-10-13
■ Earnings per share (EPS) for the quarter from July to September is expected to increase by 1.3% year-on-year, and the overestimation of the price-to-earnings ratio (PER) is weakening
■ Fluctuations in bond yields may affect stock market trends
Starting from October 13th, major financial companies in the United States will release comprehensive quarterly financial reports for the period from July to September. In the third week of October (16-20), financial institutions and electric vehicle giants, the fourth week (23-27), high-tech giants and semiconductor giants, and in the fifth week (October 30 November 3), semiconductor giants and e-commerce giants, smartphone giants, etc., the US stock market will receive financial reports from six of the seven high-tech giants known as the "Glorious Seven", as well as other closely watched companies. Even after this climax, in the second week of November (13-17), the financial reports of three retail giants and the last semiconductor company among the Seven Glorious Companies (November 21) will be released. The US stock market will continue to be influenced by the financial report content of various companies and the information transmission of management on the future business environment in the short term.
According to financial information company LSEG I/B/E/S (as of October 6th), the quarterly earnings per share (EPS) of companies in the S&P500 index are expected to increase by 1.3% year-on-year from July to September, which has remained largely unchanged since early July. Usually, EPS is expected to decrease between the beginning and end of the quarter, but there have been different developments in this quarter. On the other hand, in terms of EPS pre-release (guidance), 41 companies issued positive guidance, while 79 companies issued negative guidance, indicating that companies are cautious about their performance prospects. The market will focus on whether EPS exceeds market expectations and whether there will be support from stock prices.
The EPS of the S&P500 index began to grow after reaching a bottom in the quarter from January to March, and the market is expected to grow by 10.4% in the next year. The expected price-to-earnings ratio (PER) of the S&P500 is 17.8 times, which has decreased since late July (19.8 times), and the overestimation of the company's performance outlook relative to the stock price is weakening. However, compared with the yield of treasury bonds, the stock price level further rose. Return margin (stock return - yield of 10-year treasury bonds) is also known as stock risk premium. It is a method to judge the overvaluation or undervaluation of stocks by comparing them with bonds. Between 2008 and 2021, this gap was usually over 3%, but in early October it dropped to 0.75%, the lowest level since June 2002. As the yield of treasury bonds declines and the normalization of the return margin begins, the rising space of stock prices will be limited.
■ Fluctuations in bond yields may affect stock market trends
Starting from October 13th, major financial companies in the United States will release comprehensive quarterly financial reports for the period from July to September. In the third week of October (16-20), financial institutions and electric vehicle giants, the fourth week (23-27), high-tech giants and semiconductor giants, and in the fifth week (October 30 November 3), semiconductor giants and e-commerce giants, smartphone giants, etc., the US stock market will receive financial reports from six of the seven high-tech giants known as the "Glorious Seven", as well as other closely watched companies. Even after this climax, in the second week of November (13-17), the financial reports of three retail giants and the last semiconductor company among the Seven Glorious Companies (November 21) will be released. The US stock market will continue to be influenced by the financial report content of various companies and the information transmission of management on the future business environment in the short term.
According to financial information company LSEG I/B/E/S (as of October 6th), the quarterly earnings per share (EPS) of companies in the S&P500 index are expected to increase by 1.3% year-on-year from July to September, which has remained largely unchanged since early July. Usually, EPS is expected to decrease between the beginning and end of the quarter, but there have been different developments in this quarter. On the other hand, in terms of EPS pre-release (guidance), 41 companies issued positive guidance, while 79 companies issued negative guidance, indicating that companies are cautious about their performance prospects. The market will focus on whether EPS exceeds market expectations and whether there will be support from stock prices.
The EPS of the S&P500 index began to grow after reaching a bottom in the quarter from January to March, and the market is expected to grow by 10.4% in the next year. The expected price-to-earnings ratio (PER) of the S&P500 is 17.8 times, which has decreased since late July (19.8 times), and the overestimation of the company's performance outlook relative to the stock price is weakening. However, compared with the yield of treasury bonds, the stock price level further rose. Return margin (stock return - yield of 10-year treasury bonds) is also known as stock risk premium. It is a method to judge the overvaluation or undervaluation of stocks by comparing them with bonds. Between 2008 and 2021, this gap was usually over 3%, but in early October it dropped to 0.75%, the lowest level since June 2002. As the yield of treasury bonds declines and the normalization of the return margin begins, the rising space of stock prices will be limited.