Will company profits reflect stock market records?
There are two words that sum up Wall street’s mood for first quarter earnings: Cautiously optimistic.
“I think that’s the right way to put it,” says Alec Young, a global equity strategist with S & P Capital IQ. He forecasts 4 percent growth in profits overall in sectors like housing, telecom, and consumer staples.
But after a few years of strong profit growth, S&P 500 companies are making more sober predictions.
“84 companies have actually lowered their expectations for first quarter earnings,” says Tim Ghriskey, who works with the investment management firm Solaris Group. He says we’ve seen a pattern appear over the last two years. A strong first quarter and a weak second.
“In terms of first quarter earnings, optimistic. In terms of second quarter earnings, more cautious.”
Cautiously optimistic — at least until companies feel the effects of the sequester budget cuts.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
