U.S. companies face more pain as expected ‘earnings recession’ looms

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A booming labour market is expected to increasingly weigh on margins

U.S. companies’ earnings woes are likely to extend beyond the weak fourth quarter, as a booming labor market weighing on margins looks set to hurt results in the first half of this year.

Fourth-quarter results are in already from 344 of the S&P 500 companies, and the quarter’s earnings are estimated at this point to have fallen 2.8% from the year-ago period, according to IBES data from Refinitiv. The darkening earnings picture bolsters the case for investors who believe the stock market’s early-year rally is unlikely to last, adding to worries over how high the Federal Reserve will need to take interest rates in its fight to keep inflation on an easing trajectory.

Recent results and guidance from some of the most heavily weighted names in the tech-related space like Alphabet ,Golub and other strategists say a tight labor market that is pressuring margins for companies as a key reason for the decline in earnings, and expect these costs to remain stickier than other pressures.

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日本 最新ニュース, 日本 見出し

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