Company earnings season for the first quarter is “off to a decent start,” according to RBC Capital Markets.
The tone of companies’ commentary has been “fairly balanced, with acknowledgement of resiliency and bright spots along with acknowledgement of problems that have emerged and worries on the C suite’s mind,” said Lori Calvasina, head of U.S. equity strategy at RBC, in a research note Monday. “Consumers have been described as normalizing, healthy, stable, and careful.”
Looking at sectors within the S&P 500
SPX,
+1.96%,
RBC found that consumer discretionary and consumer staples have joined industrials in “slightly positive revisions territory” in terms of estimates for earnings per share and sales. But “tech has slipped a little,” said Calvasina.
Investors are preparing for a busy week of Big Tech first-quarter earnings. Google parent Alphabet Inc.
GOOGL,
+3.74%
GOOG,
+3.75%
and Microsoft Corp.
MSFT,
+3.20%
will release their results on Tuesday, while Facebook parent Meta Platforms Inc.
META,
+13.93%
will report on Wednesday, followed by Amazon.com Inc.
AMZN,
+4.61%
on Thursday.
See: As Big Tech determines the course of Wall Street, here is why Amazon will hold the most sway
The U.S. stock market is up so far this year, after tanking in 2022 as the Federal Reserve rapidly raised interest rates in an effort to bring down high inflation. The S&P 500 has climbed more than 7% so far in 2023, based on Monday morning trading, even as some investors worry the U.S. could fall into a recession this year.
Read: Investors scour markets for recession signs. Here’s what this closely watched credit gauge says.
Ninety companies in the S&P 500 have so far reported earnings for the first quarter, with 76.7% of them beating analysts’ expectations and 18.9% falling below estimates, according to an emailed note from Refinitiv on Monday. In a typical quarter since 1994, data show that 66% of companies beat earnings estimates and 20% miss them, according to the emailed commentary.
As for stock performance, information technology
SP500.45,
+2.17%
is the S&P 500’s worst-performing sector so far this month, down 3.1% at last check, according to FactSet data.
The consumer-discretionary sector
SP500.25,
+2.77%
has suffered the next biggest losses so far in April, down 2% based on midday trading Monday. By contrast, shares of consumer-staples companies
SP500.30,
+1.04%
have climbed 2.7% so far this month, while the industrials sector has slipped 0.7% at last check, FactSet data show.
Although the financial sector
SP500.40,
+1.60%
was hard hit in March amid fears around regional-bank failures, it’s on the rebound so far in April. Shares of financial companies have risen 2.9% this month to put it among the S&P 500’s top-performing sectors in April, according to FactSet data from around midday Monday.
Closely watched First Republic Bank
FRC,
+8.79%
will announce its first-quarter results on Monday after the U.S. stock market closes. Shares of the bank plunged last month, but they were up around 10% so far in April as of midday Monday.
The S&P 500 was clinging to month-to-date gains in early afternoon trading Monday, up around 0.3% so far in April at last check, FactSet data show.
Read the full article here