US Equity Strategy

ab25July2024GlobalResearchandEvidenceLabUSEquityStrategyEarningsBrief2Q24:July25OnTuesday,GOOGandTSLAreportedearnings.GOOGbeatexpectationsbyjust2.5%,TSLAmissedby-16.1%.Bothnamestradeddown(-5.0%,-12.3%),contributingtothebroadmarketsell-off.ThiscomparestotheS&P500(-2.3%),andNasdaq100(-3.7%).AAPL,AMZN,META,andMSFTallreportnextweek.Theirresultsshouldhelpdeterminethedirectionofthebroadmarket.33.1%oftheS&P500'smarketcaphasreported.2Qexpectationsareforrevenuestogrow4.4%andEPSby7.6%.Growthamonggroupsvariessignificantly,asshowninthetablebelow(ablendofconsensusestimatesandreportedresultswhereavailable):GroupEPSGrowth(%)TECH+24.7Financials10.1Utilities4.8Non-Cyclicalsex-Utilities0.2Industrials&Discex-AMZN-2.0Energy&Materials-3.5Source:Standard&Poor’s,Refinitiv,FactSet,UBSEarningsarebeatingestimatesby4.0%inaggregate,with68%ofcompaniestoppingprojections.EPSisonpacefor10.2%,assumingthehistoricaltrendofestimaterevisionsthroughtheendofreportingseason.Overthenext5tradingdays,167companiesrepresenting26.8%ofS&P500’smarketcapwillreportresults,includingColgate-Palmolive,Procter&Gamble,Merck,Pfizer,3M,Boeing,McDonalds,andMicrosoft.Figure1:PathofBottom-UpS&P500ConsensusEPS3.8-0.2-0.42.2-2.8-4-3-2-101234-64-48-32-16016324864HistoricalTrend%1Q242Q24(withhistoricalrevisionsprojected)QuarterEndDaysAfterDaysPriorSource:Standard&...