Amid inflation concerns, stock market awaits $9.4 trillion result day

Firms in the US and Europe worth more than $9.4 trillion will report their latest figures tomorrow at a time when concerns over the impact of heavy inflation on corporate profitability are at a fever pitch. and coming right on the back of an important Federal Reserve meeting And on the same day when there will be many key macro-economic data, there will be huge sums of money for market watchers.

“There’s no doubt it’s going to be very busy, but we love a busy market week,” said Victoria Scholar, head of investment at Interactive Investor in London. She usually writes the firm’s morning market round-up emails by herself, but on Thursday will mobilize a team of analysts to help deal with the crowd.

In a year when the S&P 500 and other major indices have fallen into bear market territory, the day will depend heavily on it. Especially after the recent rally in equities, which have already priced in a disappointing earnings season, sending the Stokes Europe 600 index up 4.7% in July.

“While the stakes are high for the shares on Thursday with respect to earnings since last week’s rally, that means valuations are now higher, with the bar slightly falling for disappointment,” said James Athe, investment director at Aberdon Plc.

The load is heavy on either side of the Atlantic. In the US, S&P 500 members with a combined market value of $6.8 trillion will report Thursday, a total of 55 companies if constituents. Nasdaq 100 are also included. Amazon.com Inc., Apple Inc. And with Intel Corp’s results, there will be a special focus on Big Tech.

For Europe, the count is even bigger, with more than 80 Stoxx 600 firms expected to report one of the busiest earnings days in at least a decade. They have a combined market capitalization of $2.6 trillion and include Nestlé SA, Anheuser-Busch InBev NV, Shell plc and Banco Santander SA.

On Wednesday, Adidas AG fell after issuing a profit warning after its sales were affected by lockdowns and consumer boycotts in China. Reckitt Benckiser Group plc climbed after raising its sales forecast as the company faced rising inflation and benefited from an infant formula shortage in the US.

Nasdaq 100 futures advanced after upbeat sales forecast by Microsoft Corp. Spotify Technology SA rallied in the US premarket after paid subscriber forecasts for the current quarter exceeded analysts’ estimates.

As always, traders, investors and brokers are creating plans to ensure that they can stay on top. “I bought an industrial-sized box of Yorkshire tea to keep the brain caffeinated and the cake tin stocked with sugar-laden treats,” said Danny Hewson, financial analyst at AJ Bell plc.

The key for equity analysts will be to provide quick responses to investors, according to Georgios Irodiacano, who covers telecommunications for Citigroup Inc. Those reporting on his watch on Thursday are Telefonica SA, InvIT SPA, Selnex Telecom SA, Orange SA and BT plc, with a total market value of $109 billion.

“There isn’t as much time to go into details as you normally would, or have ongoing discussions with people about specific results,” Ierodiaconou said over the phone. “You just kind of act like a robot and go through the process.”

Given the high volume of newsflows, the day is likely to see a lot of volatility, with stocks including ArcelorMittal SA, AB InBev, Wear Group Plc, Repsol SA, VeriSign Inc., VF Corp, Amazon moving up more than 5% in options markets. Huh. According to the London trading desk of Cowen.com, Intel and Royal Caribbean Cruises Ltd.

“About 15% of the European market reported that morning as theoretically the most important micro day of the season,” said Carl Dooley, Cowen’s head of business for the Europe, Middle East and Africa region.

Market participants will already have a lot on their plate before the first earnings release even surpasses tape. The Fed rate hike is expected to be in full swing on Wednesday, and with financial markets beginning to anticipate the central bank’s freshening peak, its remarks will be closely scrutinized.

And as if that wasn’t enough, US second-quarter GDP and weekly jobs figures, as well as German inflation numbers, will add to the weight of analysts.

Fed will inflict more pain on economy as it readies bigger rate hike

According to Laura Cooper, senior investment strategist for iShares EMEA at BlackRock International, this earnings season requires more caution than ever, given the flurry of macroeconomic challenges. “We are in this heightened macro uncertain environment, and we are starting to see demand pressure in earnings and that could increase in the back half of the year,” she said.

AJ Belles Hewson will spend Thursday working from his kitchen table, which means his time will be about “completely juggling” between media requests and the demands of the two teens. Regarding her supply of tea and cakes, “I can’t guarantee what might be left “until Apple and Amazon ramp up their offering,” she said.

This story has been published without modification in text from a wire agency feed. Only the title has been changed.

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