Strong Earnings Season Expected but Market Pullback Possible
The upcoming earnings season for the U.S. stock market is expected to be solid, though significant growth estimates for the second half of 2024 may be unlikely, according to LPL Financial.
Jeff Buchbinder, LPL Financial’s chief equity strategist, mentioned that the market isn’t expected to see a decline in the AI sector in the second-quarter results. Positive earnings news might delay an anticipated market pullback, particularly for the S&P 500 index.
Buchbinder’s research note indicated that Big Tech stocks will again significantly contribute to the S&P 500’s earnings growth for the second quarter, with other sectors like healthcare, financials, energy, and utilities also expected to contribute to earnings per share growth.
The earnings season will kick off with major Wall Street banks, including JPMorgan Chase, Citigroup, and Wells Fargo, reporting their results on July 12. Analysts predict a 9.2% year-over-year increase in the S&P 500’s EPS growth for the second quarter, with Buchbinder expecting this growth to reach double digits.
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Despite the S&P 500’s strong performance, up 14.5% in the first half of 2024 according to FactSet, Buchbinder emphasized that continued earnings growth is crucial for maintaining or building on these gains. He believes a market pullback is overdue and advises investors to wait for a dip, though he notes the upcoming earnings results may not provide that opportunity.
Within Big Tech, Buchbinder expects the “Super Six” companies—Alphabet, Amazon, Meta, Microsoft, Nvidia, and Apple—to be significant drivers of earnings growth in the second quarter. He anticipates that the broadening of earnings growth across sectors will be a gradual process extending into 2025, with Big Tech remaining a key driver in the latter half of this year.
While Buchbinder expects a market pullback at some point this summer, he suggests it may not happen until August, after most of the earnings news has been factored into stock prices.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
