The earnings season, a risky period for markets that staked everything on the recovery

Posted on Jan 15, 2021 at 6:16 am

It is a very special results season which opens this Friday with the big American banks. The opportunity to take stock of a year marked by the destructive impact of the coronavirus. And above all to get a more precise idea of ​​the future. On world stock markets, investors should indeed largely ignore the glance in the rearview mirror and focus on hopes of recovery. Since mid-November, they are the ones who set the pace on the markets. A situation that is not without risk: expectations for 2021 and 2022 are extremely high.

The fall in profits in 2020 could reach 15 to 20%, and up to 34% in Europe. Unheard of since the great financial crisis. The resurgence of the epidemic at the end of the year weighed on the activity of the last quarter, which promises to be worse than the previous one. Analysts predict an 8.4% drop in S&P 500 company earnings from the same period in 2019 (Factset consensus). In the third quarter, they had fallen 5.1%.

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