Wall Street experts expect earnings of S&P 500 companies to increase in the current quarter after three quarters of annual decline, The Wall Street Journal writes.
This could create a more stable basis for the recovery of the US stock market, which has stalled recently. The S&P 500 is up nearly 17% year to date, but the index has ended in the red for four of the last six weeks.
The consensus among experts surveyed by FactSet is for S&P 500 earnings to rise 0.5% this quarter and 1.2% for the full year.
Analysts raised their forecasts for the current quarter in the first two months, something that hasn’t happened since the third quarter of 2021, said John Butters, chief earnings analyst at FactSet.
Earnings forecasts are at or near record levels across most segments of the S&P 500, including the IT, communications services and consumer goods companies.
The sub-indices of these segments in the S&P 500 are leading the gainers this year. Thus, the indicator of shares of IT companies has increased since the beginning of the year by 41%, communication services – 43%, manufacturers of consumer goods – 32%.
In recent days, analysts have raised earnings per share forecasts for industrial companies and utility providers to record highs, the WSJ notes. The industrials subindex of the S&P 500 is up 7.1% this year, while utilities are down 11%.
David Lefkowitz, head of US equities at UBS Global Wealth Management, expects the S&P 500 to be around 4,500 at the end of December this year and reach 4,700 by the end of June next year.
As of 17:00 Moscow time on Monday, the index value is 4476.37 points.
Lefkowitz expects the resumption of student loan payments, as well as high energy prices and mortgage rates, to keep the stock market down.
Asia-Pacific stock markets rose on Friday, following the rise of Wall Street, due to growing expectations that the cycle of monetary tightening by the Federal Reserve (Fed) is nearing its end.
Stats showing a slowdown in U.S. producer price growth and a larger-than-expected increase in jobless claims confirmed that the U.S. central bank’s rate hike is weakening inflation in the United States and restraining economic growth.
Japan’s Nikkei 225 stock index was up 1.2 percent in trading, following an increase in retailer stocks.
Fast Retailing, which owns the Uniqlo brand, gained 8.5 percent on strong results at the close of trading on Thursday. Fast Retailing increased its net profit and revenue in the first fiscal half of the year and improved its outlook for the full year.
Shares of other Japanese retailers are also up, with Seven & I Holdings up 1.8 percent, Treasure Factory up 9.6 percent and Lawson up 6 percent.
China’s Shanghai Composite stock index added 0.4% in trading, while Hong Kong’s Hang Seng gained 0.1%.
China’s economic growth rate will reach the government’s target of 5 percent in 2023, People’s Bank of China (PBOC) governor Yi Gang said during a meeting of G20 central bank chiefs in Washington.
“China’s economy is stabilizing and recovering, inflation remains low, and the real estate market is showing positive changes,” said Yi Gang, quoted on the NBK website.
Leading the rise in mainland China are stocks of technology companies and battery makers, as well as raw materials for them. Contemporary Amperex Technology Co. gained 2.1%, Tianqi Lithium 6.3%, Ganfeng Lithium 6.2% and China National Software 2.9%.
In Hong Kong, shares of Geely Automobile Holdings (+3.5%), BYD Co. (+1%) and Anta Sports Products (+1.8%) rose. Meanwhile, Meituan (SPB: 3,690) (-1.8%), Tencent (SPB: 700) Holdings (-0.3%) and Sunny Optical Technology Group (-1.1%) are getting cheaper.
South Korea’s KOSPI added 0.53% in trading and Australia’s S&P/ASX 200 gained 0.48%.
Commonwealth Bank of Australia shares gained 1%, National Australia Bank – 1.1%, Fortescue Metals – 0.9%. At the same time, BHP Group securities fell by 0.1%.
Asia-Pacific stock indices rose on Tuesday, recovering from declines in previous sessions after Wall Street and European markets.
U.S. main indices were up 0.4-1.2%, while the Stoxx Europe 600 composite added 1% on the news that Swiss bank UBS is buying distressed Credit Suisse for 3bn Swiss francs ($3.25bn).
The key event of the week will be the meeting of the Federal Reserve System. Analysts and market participants generally believe that due to the tense situation in the banking sector, the Federal Reserve may raise the prime rate by only 25 basis points. At the same time many economists admit the probability that the rate will be kept at the same level.
China’s Shanghai Composite stock index rose 0.5%.
Shares of Kunlun Tech (10.7%), Zhonghang Electron (6%), Inspur Electronic (1.3%), Wuxi Apptec (5.4%) and Changchun High New (6.7%) showed the most notable gains.
Hong Kong Hang Seng indicator added 0.9%.
Healthcare and consumer sector stocks were the growth leaders. Wuxi Biologics gained 7.3%, Li Ning gained 5.2%, Chow Tai Fook Jewelry gained 4.4% and AIA Group gained 2.8%.
Shares of Bilibili Inc. jumped more than 9% on news that Chinese regulators had issued licenses to sell 27 foreign video games in the country. Bilibili will be the distributor for some of them.
South Korea’s Kospi index rose 0.4%.
The market value of one of the world’s largest chip makers Samsung Electronics Co. rose 0.3% and automaker Hyundai Motor rose 0.2%.
Australia’s S&P/ASX 200 index rose 0.8 percent.
The minutes of the March meeting of the Australian Central Bank, released on Tuesday, showed that the regulator’s leadership is ready to consider a pause in the cycle of rising rates at the next meeting.
Shares of Australia’s leading banks Macquarie Group, Commonwealth Bank, ANZ Group, Westpac Banking and NAB rose 1.3-2.7%.
Major mining and energy companies, including BHP Group (1.9%), Pilbara Minerals (3.6%), Whitehaven Coal (3.5%) and Woodside Energy (1.8%) also rose.
Japan’s stock exchanges are closed Tuesday in observance of Vernal Equinox Day.
