Second quarter earnings

YOU NEED TO KNOW

• With 89% of companies having so far reported quarterly earnings in the US and 77% in Europe, second quarter earnings are down around 9% year-on-year (yoy) in the US, but have come in a lot better than expected – a sign that consensus expectations were very conservative.


• The second quarter reporting season is once again showing marked differences between a much stronger-than-expected US earnings season and that of European companies. As mentioned previously, this is a good reminder that sector composition matters when assessing the prospects for regional equity markets.


• This earnings season is showing that markets are far from efficient in forecasting growth prospects. Amid our more constructive macro view, we maintain our overweight equities and our regional and sector views are unchanged, with holdings in the information technology and healthcare sectors amongst others, and, regionally, a greater exposure to US equities and emerging market equities over their European and Japanese counterparts.


 

Q2 EPS Summary

^{Non-Independent Research}

^{The information contained in this article is defined as non-independent research because it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research, including any prohibition on dealing ahead of the dissemination of this information.}

^{How to Use this Information}

^{This article contains general information only and is not intended to constitute financial or other professional advice or a recommendation that any recipient of this information should make any particular investment decision. Always consult a suitably qualified financial advisor on any specific financial matter or problem that you have.}

^{Except insofar as liability under any statute cannot be excluded, neither Brown Shipley nor any employee or associate of them accepts any liability (whether arising in contract, tort, negligence or otherwise) for any error or omission in this article or for any resulting loss or damage whether direct, indirect, consequential or otherwise suffered by the recipient of this article.}

^{Investment Risk}

^{Investing in stocks either directly or indirectly carries investment risk. The value of equity based investments may go down as well as up over time due to factors such as, market volatility, interest rates, and general economic conditions.}