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Getting Set for the Q2 2019 Earnings Season

Now that in we are in July 2019, it means one thing as far as the US stock market is concerned: we are about to get into the US earnings season. Officially, the US earnings season for Q2 2019 commences on Monday July 15, 2019. Wall Street is not expecting a very stellar earnings season, as it expects the US-China trade war and the gloomy global economic forecasts to weigh on company earnings.

The earnings of the S&P500 index are being expected to fall by 2.6% on an annualized basis and earnings of small cap and technology stocks are expected to decline by as much as 12% on the average. If earnings indeed decline it will be the first time since 2016 that earnings declined for two quarters in a row.

The sector for industries and materials, which were the most exposed sector to the US-China trade imbroglio, may suffer the most. Also, data from Factset shows that nearly 4 out of 5 companies have lowered their forecasts, of the 114 companies that have issued earnings projections so far.

So far, Wall Street is surging to record levels with the S&P500 pushing past the 3,000 mark for the first time yesterday. The Dow is also surging higher. However, if the earnings season starts off on a bad note next week, the indices could take a breather and we may also see some sort of a selloff. However, the expected rate cut by the US Federal Reserve at the end of July could help offset any selloffs that may occur in the US markets.

Netflix will report earnings next week. Read our special report to get ready: NFLX Q2 Earnings Preview: Netflix Expands Internationally.Don’t miss a beat! Follow us on Twitter.

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