Earnings Update: So Far, So Good!

LPL Research reports that “Earnings season off to a good start. Third quarter earnings season is rolling and, so far, results have been quite good overall, supported by strong U.S. economic growth, robust U.S. manufacturing activity, tax cuts, and big increases in energy and financials sector profits. Below we recap the results of earnings season thus far, discuss why we expect strong results to continue throughout the reporting season, and highlight several keys we are watching.”

Key takeaways include:

  • With about one-fifth of third quarter earnings results in, the numbers have been solid thus far despite tariffs and increasing wage pressures.
  • We expect the good results to continue based on the favorable U.S. macroeconomic environment, including robust manufacturing activity and strong nominal GDP growth.
  • We’ll be keeping an eye on profit-margin pressures, an eventual peak in earnings growth, and China-U.S. trade tensions, plus possible slower growth in Europe.

To read more from John Lynch Chief Investment Strategist, and Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial, click here.