JPMorgan Strategists Say Earnings Unlikely to Boost Lofty Stocks

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Mislav Matejka,S&P 500,Corporate Earnings

(Bloomberg) -- Don’t bank on an upbeat corporate earnings season to drive equities higher as much of the optimism is already priced in following the record...

-- Don’t bank on an upbeat corporate earnings season to drive equities higher as much of the optimism is already priced in following the record-breaking rally this year, according to JPMorgan Chase & Co. strategists.First-quarter profit estimates have been reduced going into the reporting period, lowering the bar for Corporate America to beat expectations, the team led by Mislav Matejka wrote in a note.

JPMorgan’s equity strategists have remained among the more bearish voices on Wall Street, even as the S&P 500 rallied 10% in the first quarter. The gains have since cooled slightly after hotter-than-expected inflation data reduced the odds of Federal Reserve rate cuts. Increasing geopolitical tensions following Iran’s unprecedented strike on Israel are also feeding into volatility.

Not everyone is as pessimistic. Societe Generale SA strategist Manish Kabra expects a strong earnings season to continue to drive the bigger US stocks. While rising bond yields may be a headwind for the S&P 500, a “long plateau of Fed rates should keep a lid on yields,” he said last week.

Iran launched explosive drones and missiles at Israel in retaliation for a suspected Israeli attack on its consulate in Syria on April 1, a first direct attack on Israeli territory that has stoked fears of a wider regional conflict. Below are analysts' quotes on how financial markets are likely to react to developments.In this article, we discuss the 10 unstoppable stocks that will make you richer.

 

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