US companies’ profits have exceeded forecasts by 4.6%, the European ones by 2% and Japanese firms by 6.7%. This has fuelled a strong rally in the stock markets in just a few weeks. But is there room for the markets to rise further?
LONDON | UBS analysts | Actual reported earnings are showing strong numbers; based on reported earnings so far Q2 is one of the strongest seasons in c. 5 years.
LONDON | Barclays | Is this it? In the last week earnings estimates have risen by 11bps. At first glance you’d be forgiven for thinking that’s a trivial amount. But after years of near-constant downgrades ,we believe it could be very relevant, particularly when taken alongside a reporting season which is proving surprisingly strong. Of course one swallow doesn’t make a summer, but this is an important development nonetheless. If this trend continues, it could finally mark the end of the downward cycle.