It’s Corporate earnings season, the time of year where investors find out how much of a profit companies brought in at the end of 2019, or even if they brought in any at all.
Analysts are said to be setting the bar very low as far as expectations go, predicting S&P 500 companies in particular will see falling profits for the fourth-straight quarter. This, according to earnings insight firm FactSheet, hasn’t happened in four years.
Since stock prices often follow the trend of corporate earnings, this could either be a winning sign or a warning sign for investors and the market at large. 2019 bucked the trend, as investments put the S&P 500 on track to one of its best returns in decades, even though profits had been sliding downward.
JP Morgan Chase (NYSE: JPM) and other top banks recently ushered in this earnings season with their reports. Things are off to a solid start as JPM blew forecasts away on January 15th 2020, when its Q4 2019 earnings came in at $2.57 billion, well past the $2.36 billion estimate Wall Street analysts expected, according to Markets Insider.
Delivering constant growth started to become a challenge in 2019, because companies weren’t getting help from
the lower tax rates that they had the year before. This was also during a time when the Federal Reserve was cutting interest rates every few months and Canada’s central bank was contemplating similar moves.
Even so, the Dow Jones is less than 4% away from hitting the 30,000 point mark after opening the new year breaking fresh records, along with the S&P, Nasdaq and Toronto Stock Exchange.
Experts say
looking ahead to 2020 is exactly what CEOs should be doing to show investors they are delivering more, as opposed to focusing on how much profit they made at the end of 2019.
Are you optimistic about your portfolio as Q4 2019 results emerge? Let us know in the comments below.