Q2 Earnings preview – easier FX, sequentially a bit better growth and hurdle rate has come down

A continuation of EPS downgrades from here might become a problem for market direction given that current
P/E multiples are at multi-year highs. Elevated equity valuations offer little cushion against potentially another
round of earnings cuts.

Given this, the Q2 reporting season, which is starting in earnest this week, will be closely watched by investors.
We find the general sentiment to be nervous following last week’s weakness in European stocks. Many fear that
potential earnings disappointment could lead to further increase in market volatility.

europe growth

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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