Investors look to see upcoming US earnings in 2021 –

Investors look to see upcoming US earnings in 2021

NEW YORK (Reuters) – Investors will be eager to see whether quarterly reports and outlooks from US companies validate expectations of a strong 2021 rebound in earnings and the economy, which was ravaged by the coronovirus epidemic last year.

FILE PHOTO: Traders work on the first day of in-person trading, since closing during an outbreak of coronovirus disease (COVID-19) on the floor at the New York Stock Exchange (NYSE) in New York, USA. May 26, 2020. REUTERS / Brendan McDermid

US stocks are at record highs, largely boosted by optimism that the vaccine’s rollout to fight the COVID-19 virus will allow that recovery, while expectations of more fiscal stimulus under US President-Elect Joe Biden also fueled the market. Is left behind.

Earnings report for the final quarter of 2020 closed this week, with JPMorgan, Citi and other big banks releasing results.

According to Refinitiv’s IBES data, S&P 500 companies’ earnings are expected to decline 9.8% in the fourth quarter from a year earlier.

Earnings are expected to decrease this year with an estimated 16.4% growth for the first quarter. The forecast has improved since the fall, while the S&P 500’s earnings are expected to grow 23.6% in 2021, with an easier comparison to benefit by 2020.

Investors may be even more curious to learn what company officials have said about 2021 that they are seeing fourth-quarter results, which are increasing virus cases in the United States and Europe.

“Management and analysts will not necessarily be focused on the rear-view mirror. They are really thinking about 2021, ”said Kenneth Lyons, CFRA Director of Research.

Leon said it is also important to “influence the pulse of each sector and investors in terms of thinking whether there is an attractive price or whether they need to take a reprieve,” Leon said.

Based on data from the S&P 500 refinery, it is trading at 22.7 times forward earnings, well above the long-term average of about 15.

(Graphic – US Income for Q4 🙂

“The lanes already reflect a very positive outlook for earnings,” said Rick Mechler, partner at Cherry Lane Investments, a family investment office in New Lennon, New Jersey.

The energy and industrial sectors saw the biggest drop in income in all sectors in the fourth quarter.

While economically sensitive sectors such as the broader market have been outperforming in recent months, they still lagged behind technology for 2020, and in general their valuations as lower prices than other sectors Is seen.

A large proportion of cyclical names fall under the “price” label, and investors have looked at the Russell 1000 price index which narrowed the gap on the Russell 1000 News index.

Cases of the virus are still on the rise, with many strategists expecting a major recovery in the second half of the year.

“Most likely, the second-half outlook will go higher as corporations gain clarity and ultimately confidence,” Lindsay Bell, chief investment strategist at Allie Investment, wrote in a report on Friday.

The uncertainty surrounding the recovery is getting even more important information from companies at this stage, even if it is not “formal” guidance, said Quincy Crosby, chief market strategist at Prudential Financial in Newark, New Jersey.

“It is important for a market to turn to the corner,” he said.

Reporting by Caroline Valatevich; Additional reporting by Louise Kraskoff; Editing by Alden Bentley and Cynthia Osterman


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