Hello,

 

Last Friday marked the start to the Q2 earnings season, as US Bank JP Morgan Chase, released earnings results before the bell of the New York Stock Exchange (more below). In the US, publicly traded companies must release their most recent quarter’s financial performance in a report called Form 10-Q.

 

As most companies follow the tradition of reporting Q2 results between mid-July and the end of August, investors can at times see hundreds of earnings reports a day. This can lead to increased volatility as investors react to earnings surprises, both positive and negative. From an analyst perspective, earnings reports from companies in various sectors (e.g., consumer goods, technology, financial’s) provide insights into consumer spending, business investment, and overall economic activity. This year in Q2, the S&P 500 is expected to have the strongest performance in two years, with a forecast of 8.8% earnings growth and 4.6% revenue growth. This is an example of one input into our overall top-down investment process. While we approach the world from a top-down perspective, always we aim to cross-check that perspective against market developments. When we position our portfolios and our funds, we are very cognisant of medium-term market trends and long-term structural factors.

 

As always, if you wish to discuss anything in further detail, please do get in touch.