S&P 500 Earnings Preview: Deeper Downward Revisions Set Companies Up for Big Beats

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S&P 500 News

Goldman Sachs Group Inc,Jpmorgan Chase & Co,Wells Fargo & Company

Stocks Analysis by Christine Short covering: S&P 500, Goldman Sachs Group Inc, JPMorgan Chase & Co, Wells Fargo & Company. Read Christine Short's latest article on Investing.com

Important earnings season ahead as investors look for confirmation that the US economy is still heading for a soft landingBanks on deck this week: JPM, WFC out on FridayThe wait is over for earnings watchers, as the latest quarterly read on US corporations kicks off with reports from JPMorgan Chase on Friday.

Since June 30, Q3 earnings estimates have come down by 3.6 percentage points, more than the 3.3 percentage points that we’ve seen on average over the last ten years. This compares to the mere 0.5 percentage points that analysts drew down Q2 2024 estimates at this point in the quarter. Lower expectations are a good catalyst for more impressive top and bottom-line beats during the Q3 season. However, as quarterly results are backwards looking, it’s forward looking guidance that trumps all. Companies that can beat on the top and bottom-line, while increasing Q4 and/or CY 2025 guidance will likely receive the best reception.There will be a lot to talk about Q3 on calls, and you better believe analysts will be asking a lot of questions.

Given the latest jobs data, which showed an unexpectedly high number of jobs created in September, and an uptick in wage growth, there will likely be conversations around labor inflation. This could then cascade into what it all means for the upcoming FOMC meeting on November 7.report, expectations for a 50 basis point interest rate cut next month have dropped to zero.

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