Experts say the upcoming earnings season will be overshadowed by the broader economic climate, with interest rates and inflation data more closely watched than individual company reports.
“There's no shortage of headwinds impacting earnings, such as reduced demand, inflated inventories, higher costs,” said Lesley Marks, chief investment officer of equity at Mackenzie Investments. Right now, the bigger economic picture of inflation and interest rates is much more important to investors than individual earnings reports, said Currie.
Much of the focus this earnings season will be on what companies have to say about their outlook for 2023, said Angelo Kourkafas, an investment strategist at Edward Jones. “It'll be interesting to see if on the Q4 earnings report season, we see those earnings expectations start to come down for this year,” she said.
Aritzia’s earnings reported Thursday are a good example of the difficulties some companies have been facing with inventory and demand amid geopolitical volatility, Marks said.Though some companies have already signalled their earnings may be dampened, Kourkafas thinks there’s room for some good news.