Current Market View: Corporate earnings performances during the third quarter period will depend heavily on trade war effects and the economic trends that began during the second quarter.
For the second consecutive quarter, EPS growth in the S&P 500 dropped and the word “tariff” was used in the Q2 conference calls of 142 different companies in the S&P 500. As a result, expectations for earnings growth have steadily deteriorated amongst analysts.
However, this leaves open the potential for upside surprises. In Q2, roughly 3/4 of all companies in the S&P 500, and this trend could continue during the next reporting periods.
Our Predictions for Q3 2019: The S&P 500 finished the Q2 reporting period trading at 2,940 and market valuations have since risen by just 1.63%. Despite the continued concerns over global growth, a steady EPS performance for the S&P 500 in Q3 should help the index vault key psychological levels at 3,000 for the majority of the coming quarterly period.
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