Commentary – US earnings in spotlight
Earnings season has officially started in the US, as last week, some of the major companies reported their quarterly results for 1Q23. The results were largely mixed. Many blue chips from financial sector displayed favorable results, including Bank of America (BAC), Goldman Sachs (GS), and Charles Schwab (SCHW), that all surprised on the upside in terms of EPS. Regarding the topline figures, however, the latter two disappointed on the downside. Importantly, Bank of America declined regardless of beating analyst forecasts. Giants from consumer staples sector have also delivered positive surprise, with Johnson & Johnson (JNJ) and Procter & Gamble (PG) reporting higher than expected top and bottom line figures (nevertheless, the former lost the ground during the week). From tech, Netflix (NFLX), Tesla (TSLA), IBM (IBM), and Taiwan Semiconductors (TSM) posted mixed results.
The week ahead is likely to be turbulent. On the earnings side, many of the large and mega-caps are reporting their financial results. Examples include Microsoft (MSFT), Alphabet (GOOGL), Amazon.com (AMZN), Meta Platforms (META), Coca-Cola (KO), PepsiCo (PEP), and Boeing (BA). On the macroeconomics side, the preliminary figures will be reported for 1Q23 US and Euro Area GDP. In addition, the US will report the PCE index (major inflation indicator) and both CB and Michigan consumer confidence indices.
