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Why you can expect a "weak" earnings season
The third earnings season has arrived, but according to Saxo Bank’s Peter Garnry, overall expectations for the S&P 500 are not as high as they were earlier in the year.
This, he explains, is because margins have stopped expanding, which means revenue has to do boost earnings, and therefore he thinks this quarter will be" quiet weak by revenue".
He says that one area that will be down in particular are financials, mainly because higher rates have slowed down refinancing in the mortgage divisions.
But it's not all bad and and when it comes to growth, Peter suggests looking at cyclical stocks, as leading indicators are pointing up for global economy. In particular, he says GM, Ford and aluminium giant Alcoa could be interesting investments.
Alcoa is set to report its quarterly figures on Tuesday. For decades it has marked the unofficial kickoff to the quarterly earnings season ritual.
02:05 minutes
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