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Q3 Earnings Starting This Week: What to Expect

Posted Monday, October 14, 2019 by
Arslan Butt • 1 min read

The US stock markets are gearing up for Q3 earnings this week, and it will be interesting to see how much of an impact the US-China trade war has had on American-listed companies. According to Refinitiv estimates, Q3 earnings for SPX companies are expected to slide 3.1% lower after thr +3.0% climb higher seen in the previous quarter.

Weakening oil prices are expected to weigh heavily on earnings and revenues in the energy sector. The energy sector is expected to see a 32% decline in earnings and a 9.5% decline in revenues for Q3 2019, as per a Credit Suisse forecast. Excluding the energy sector, S&P profits are expected to register only a 1% decline, according to Refinitiv.

After the energy sector, the focus is likely to fall on the tech sector as well, which could see margins shrink by 14.8% in Q3 2019 vs. a 3.6% contraction for all S&P companies in total. Big tech companies feature among 6 of the top 10 companies that are expected to see their earnings impacted most by margins. The list includes formidable names like Amazon, Apple, Facebook and Alphabet.

On the positive side, however, the financial services and real estate sectors are expected to see an uptick in earnings in the third quarter. Financial companies could see their profits rise by 1.4% while real estate could see profits growing by 2.7% during this period.

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