Industrial earnings take centre stage in third quarter with trade, economy in focus

This translation has been automatically generated and has not been verified for accuracy.Profit reports from big manufacturers and other industrial firms arriving this week will provide investors with a crucial corporate gauge of the U.S. economy’s health and the fallout from trade tensions between Washington and Beijing.

While the industrial sector represents slightly less than 10% of the overall S&P 500 stock index, it can provide an outsized perspective on the economy. It includes major multi-national manufacturers as well as transportation companies whose results offer a barometer of economic activity. Third-quarter earnings overall for industrial companies are expected to rise by just 0.7% from a year earlier, according to IBES data from Refinitiv. That would represent a better performance than for the full S&P 500, for which earnings are expected to fall by 3.2%.

“The majority of these companies stopped their capital expenditures as a result of uncertainties because of the U.S.-China negotiations,” Aguilar said. A rebound in capital spending could help restore earnings growth, he added.

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