2 charts I'm thinking about as earnings season heats up ๐
Most companies will probably beat expectations. But are margins holding up? ๐ค
Third quarter earnings season kicked off Friday with the nationโs largest banks announcing financial results for the July-September reporting period.
Over the next few weeks, all of the big publicly traded companies will tell us how they did in Q3 and provide guidance for what they believe will come in the next few quarters. (Bloombergโs Jess Menton and Sagarika Jaisinghani have a great roundup of some of the big narratives to watch in the earnings announcements.)
Will we get the bad news that puts an end to the market rally and sends prices spiraling lower? Maybe. But that seems unlikely.
If a companyโs financial performance is way out of line with analystsโ expectations, theyโll usually make an announcement before releasing quarterly results โ or theyโll have insiders signaling analysts to revise their estimates.
So with that in mind, donโt be surprised if earnings season follows the oft-repeated pattern of most companies beating estimates. Itโs one of the most consistent trends in the stock market.
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