Summary:

  • Earnings season on Wall Street has started successfully
  • SP500 (US500 on xStation5) could go towards 2500 points after a defense of 2400 points
  • Alphabet (GOOGL.US), General Motors (GM.US) and Exxon Mobil (XOM.US) are scheduled to post their earnings next week

A second week of the earnings season on Wall Street is coming to an end. We have already known financial reports from the largest banks listed on Wall Street. A release of earnings from Microsoft (it took place yesterday) has kicked off the season for technological companies.

Until now, there have been reports from 60 companies listed on the US500. Weighing EPS for Q2 2017 against the same indicator from the previous year, a 8.82% increase has been registered so far. It suggests a final outcome much above expectations – investors assume that all companies will be able to improve their EPS, on average by 6.6% yoy. Furthermore, all firms’ revenue has picked up 4.48%, therefore we can say that a beginning of the earnings season has been successful as of yet.

link do file download linkThe EPS of all companies listed on the US500 has increased 8.82% year-over-year thus far. Source: Bloomberg

Moreover, when we take a closer look at a comparison of real figures to estimations it looks impressively as well. Companies which have unveiled their financial reports so far have been able to exceed expectations as much as 6.05% (EPS). Whereas, joint revenues have outpaced estimations by 1.42%. All that means that the Wall Street has started off the earnings season on the right foot.

link do file download linkThe US500’s EPS has exceeded expectations as much as 6.05% hitherto. Source: Bloomberg

Looking ahead, we are going to have financial reports from the largest corporations as soon as the following week – Alphabet (GOOGL.US), General Motors (GM.US) and Exxon Mobil (XOM.US). It’s worth mentioning that earnings coming from technological as well as energy branches could draw most of investors’ attention.

link do file download linkAlphabet (GOOGL.US), General Motors (GM.US) and Exxon Mobil (XOM.US) are expected to post their earnings next week. Source: Bloomberg, XTB Research

Taking into account a powerful start of the earnings season and lower US yields, recent increases of the US500 should not have taken investors by surprise. To be precise, the index has been able to achieve new record levels, what’s more an upward trend seems to be firm, hence a possibility that the price strikes 2500 before long cannot be ruled out. Let us remind our broader analysis of the earnings season.

link do file download linkAfter a successful retest of 2400, the US500 could go towards 2500. Source: xStation5