Gearing Up for Q1 Earnings - April 10, 2019
Q1 earnings season unofficially begins on Friday, April 12.
- It kicks off with reporting from several major banks.
As of April 9, Refinitiv is forecasting a 2.5% drop in Q1 S&P 5001 profits.
It’s a stark contrast from double-digit growth in 2018.
- The cut in the corporate tax rate aided results last year.
- Overseas growth has slowed, which will likely take a bite out of earnings of larger multinationals.
- The strong dollar appears set to modestly pressure revenues, as companies translate overseas sales into more expensive dollars.
- Profits margins are forecast to decline.
Recent market gains suggest a weak Q1 may already be priced into shares.
- The bar is set low. Any upside surprises could be supportive.
- Recent data suggest U.S. and China growth may stabilizing.
- Fed flexibility has encouraged the bulls.
A weak Q2, if it occurs, is not priced into shares. Corporate guidance could sway sentiment.
Adhere to the investment plan. It is the roadmap that guides a long-term investor when uncertainty creeps into the picture.