Investor attention remains fixated on third-quarter earnings season, with about one-fifth of the S&P 500 slated to report results this week. Zions Bancorporation popped about 6% after the bell Monday on strong earnings, while SAP SE gained nearly 4% after lifting its guidance.
So far, about 14% of companies in the broad index have reported results, with more than 7 out of 10 topping earnings estimates, according to FactSet. While it's early in the season, some on Wall Street have raised concerns that the bar may be too high for corporate America. Despite a recent, Megan Horneman, chief investment officer at Verdence Capital Advisors, thinks that 2025 estimates appear unrealistic.
"It is good to see analysts getting realistic about 2025 earnings growth," she said. "However, at 15% earnings growth, we believe it is still too optimistic given the expectation for slower economic growth in 2025." She added that commentary on interest rates and insight into inflation and the economy will remain top of mind for investors this season.
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