Published
8 months agoon
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Good morning. Asia and Europe are awash in red as investors fret over U.S.-China geopolitical tensions, plus a new wave of shutdowns and coronavirus spikes from Hong Kong to California.
Let’s check in on the action.
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Today is the biggest day on the earnings calendar so far with banking giants JPMorgan Chase and Wells Fargo, plus Delta Air Lines, due to report Q2.
For most of the S&P 500, it’s going to be a brutal quarter. The Street consensus is earnings will fall 44% year-on-year. As my colleague Anne Sraders points out, Goldman Sachs thinks the nadir is closer to -60%. The numbers will be so bad that, Goldman advises, investors should probably all but ignore them and just tune into management’s comments.
“Given the recent resurgence of COVID-19 cases in the U.S., we expect management commentary will prove more important to gauging the forward path of earnings than actual 2Q results,” the analysts wrote in a recent investor note.
Earnings-wise, this quarter will be an across-the-board dud. According to Refinitiv, tech and utilities earnings growth will be merely bad (not awful). They project EPS on utilities to dip 4.8% and IT to drop 8%. Yes, that counts as the best of the bunch.
For the ugly, you need look no further than energy. Refinitiv analysts are putting a negative-154.9% handle on the energy sector.
Let’s get to this week’s calendar. 128 companies have scheduled earnings calls, with big names from each sector set to report. I’ve listed the big ones here:
But that’s not to say there’s no room for surprises. Beats could still happen, particularly if, say, trading revenues lift the bottom line of the banks, or if pharma or health care experienced a turnaround towards the end of Q2.
Stay tuned.
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Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
A note from my Fortune colleagues on a timely new initiative:
Many companies are speaking out against racial injustices right now. But how do they fare in their own workplaces? Black employees in the corporate world, we want to hear from you: Please submit your anonymous thoughts and anecdotes here. https://bit.ly/WorkingWhileBlack
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