Q3 earnings season provides reassuring results.

Q3 earnings season is almost finished showing decent results which eveen improved since our last October’s update. At the index level, around 80% of US companies have beaten analysts’ exppectations for earnings and sales.

Highlights:

  • Q3 earnings season is almost finished showing decent results which eveen improved since our last October’s update.
  • At the index level, around 80% of US companies have beaten analysts’ exppectations for earnings and sales.
  • The earnings growth increased in Q3 vs Q2 both in Europe and in the EA
  • In the US, the earnings guidance improved and is above norm. The US cappex increased in Q3 vs Q2 but capex intentions remain subdued at a cyclical low.
  • After having being cut, Q4 expectations are not so exuberant anymore. Thaat said, 2020 estimates remain too bullish (growth of 10% vs our estimate of 3-to-4%) with risks of further negative revisions going forward.
  • The most export-oriented EM countries (Korean, Taiwan) show negative yyearly earnings growth. Indian companies are turning around and have significantly beaten analystts’ expectations.
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