Investing.com — The third-quarter earnings season has been stable thus far, with company incomes topping expectations set in the beginning of the reporting interval in early October, in response to analysts at Financial institution of America Securities.
Merchants are presently assessing a busy week that can see roughly 169 firms unveil their newest returns, together with figures from the so-called “Magnificent Seven” group of tech trade giants like Google-owner Alphabet (NASDAQ:), Fb-parent Meta Platforms (NASDAQ:), e-commerce behemoth Amazon (NASDAQ:), software program participant Microsoft (NASDAQ:) and iPhone-maker Apple (NASDAQ:).
One of many key questions lingering over the most recent quarterly outcomes is whether or not they are going to assist not too long ago elevated inventory valuations. In response to LSEG knowledge cited by Reuters, the S&P 500’s price-to-earnings ratio — a gauge of earnings estimates for the following 12 months — stood at 21.8 final week, near the best degree in additional than three years.
The earnings deluge, together with a raft of US financial knowledge and the upcoming US presidential election on Nov. 5, may check the endurance of those frothy valuations.
In a be aware dated on Oct. 28, the BofA analysts led by credit score strategist Yuri Seliger famous that 37% of investment-grade US public firms had reported 38% of the anticipated combination third-quarter earnings.
“The outcomes reported thus far have been comparatively sturdy,” the BofA analysts mentioned, citing an inner earnings tracker. “Primarily based on the precise outcomes when obtainable and bottom-up expectations in any other case, we’re monitoring a +5.1% and +4.4% year-on-year earnings and income progress, respectively.”
They added that returns thus far have are available in 5% above estimates established initially of the quarterly earnings season on Oct. 7 — larger than a 1.9% constructive shock within the second quarter and three.7% pre-pandemic common. Revenues have additionally been stronger than both of these intervals as properly, the analysts famous.