While good business news has been in short supply, investors may take slight comfort in coming weeks from U.S. corporate earnings that are likely to be bad, but not as bad as they have been.
Overall, S&P 500 quarterly results tend to beat analysts' cautious expectations, and they could do that even more than usual this reporting season, strategists said. In a break from the typical trend, guidance from U.S. companies has been more positive than negative and estimates have been improving in recent weeks to reflect more upbeat guidance.Advertisement
That could weigh on fourth-quarter guidance and overshadow some of the better-than-expected results, he said. "Firms that reported Q3 already have declined 1per cent on average despite the big beats, suggesting the bar is much higher for investors," UBS strategist Keith Parker wrote in a note. The consumer discretionary sector , which includes some of the companies most heavily impacted by coronavirus lockdowns such as those in retail, travel and tourism, is slated to post a 34per cent year-over-year decline in earnings, Refinitiv's data showed.