Corporate earnings are likely to benefit from a potential peak in the dollar and a subsequent gain in commodity pricesJP Morgan Chase office in New York, the US. Picture: REUTERS/Eric Thayer
Typically, fourth-quarter earnings are 3% to 4% higher than in the second quarter, instead of lower, they said. This failed to derail a powerful rally in both US and global equities in 2019 thanks to the continuation of monetary easing by central banks and appealing valuations. Although US companies have just started reporting earnings, results so far are “encouraging”, with 28 S&P 500 firms posting 3% profit growth from a year earlier, according to JPMorgan.Looking back at the past three reporting seasons, which saw $1 to $2 upgrades coincide with a rally in equities, the strategists believe a similar scenario will play out again.