All Eyes On Q1 Earnings This Week for S&P 500 Investors
April 12 2023 - 6:25AM
Finscreener.org
Equity investors will be impacted
as the earnings season for Q1 is all set to begin this week.
Several big banks and financial services companies,
including JPMorgan Chase (NYSE:
JPM),
Wells Fargo (NYSE:
WFC), and Citigroup
(NYSE: C), will report their Q1 earnings this
week.
Analysts expect earnings for
companies part of the S&P 500 to report a decline of 6.6% in
quarterly earnings, which would be the largest quarterly decline
since Q2 of 2020. Out of all companies that issued guidance,
79 have issued negative earnings guidance, and 27 expect the bottom
line to increase year over year.
What to expect from the big S&P 500 banks in
Q1?
Despite an uncertain macro
environment, analysts expect JPMorgan to increase sales by 14.5%
year over year to $36.18 billion, while adjusted earnings might
expand 29% to $3.4 per share. Comparatively, Wells Fargo sales are
forecast to rise 14.3% to $20.1 billion, while earnings are on
track to widen by 27.3% to $1.12 per share.
Valued at a market cap of $89
billion, Citigroup sales are estimated to rise 4.7% to $20.1
billion with adjusted earnings of $1.7 per share, down 15.8% from
the prior-year period.
Inflation report for March 2023
Next week, we can expect the
latest updates on inflation with the release of the Labor
DepartmentU+02019s Consumer Price Index (CPI) for March on
Wednesday. It is projected that prices rose 0.3% last month,
compared to a 0.4% gain in February. Year-over-year, prices likely
increased just over 5%, which is a deceleration from the 6% gain in
February.
The annual rate of core
inflation, which excludes volatile food and energy costs, is
projected at 5.6%, up slightly from 5.5% in February. Although
headline inflation has cooled significantly after reaching a
40-year high of 9.1% in June 2021 due to the Federal
ReserveU+02019s raised interest rates, it remains well above the
central bankU+02019s target range.
On Thursday, we will also see the
release of the Bureau of Labor Statistics (BLS) Producer Price
Index (PPI) for March, which tracks inflation from the standpoint
of manufacturers and wholesalers. It is projected that producer
prices remained unchanged last month after falling 0.1% in
February.
On an annual basis, theyU+02019re
projected to have risen just 3.1%, decelerating from 4.6% in
February, marking the slowest annual gain in over two
years.
Update for retail sales
The U.S. Census Bureau is set to
release the latest figures on March retail sales this Friday,
providing a crucial update on consumer spending. According to
forecasts, sales are expected to have remained unchanged, with a
decline of 0.4% in March, following the same pace as
February.
The National Retail Federation
(NRF) has projected that sales will grow between 4% to 6% this
year, amounting to a range of $5.13 trillion to $5.23 trillion by
the end of 2023. The majority of this increase is anticipated to
come from non-store and online sales, which are expected to surge
between 10% to 12%, reaching $1.41 trillion to $1.43
trillion.
However, rising interest rates,
elevated inflation, and mounting concerns over a recession could
potentially result in a slower growth rate when compared to 2022,
where overall sales grew by 7%.
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