David Darst, Chief Investment Strategist for Morgan Stanley Wealth Management, says there are three things to look for this earnings season.
It’s earnings season, one of four time a year when stocks move the most.
So far, the picture is mixed, with around 65% of companies reporting earnings that beat forecasts. But, revenues have been on the lighter side, with only half of S&P 500 companies reporting better-than-expected earnings.
Growth in earnings has not been evenly distributed across sectors. According to statistic compiled by Thomson Reuters I/B/E/S, the financial services companies in the S&P 500 are reporting a blended earnings growth rate of 24%. On the other side of the spectrum, materials companies are showing their quarterly earnings shrink by 9% while energy companies are seeing a drop in revenue by nearly 10%.
Also disappointing investors are tech companies. With 17 tech companies in the S&P 500 index reporting earnings so far, the average blended earnings are down 5.5%Read More »from David Darst: Three keys for earnings