LPL Financial Market Signals Podcast

Upcoming Earnings Season Looks Good │ LPL Market Signals podcast

LPL Research

Don’t miss this week’s Market Signal podcast. Our strategists discuss the upcoming earnings season and why it’s expected to be good.

The cut in corporate tax rates added about 8% to S&P 500 corporate earnings growth in 2018 while other elements of the 2017 tax reform provided an additional boost last year. That is not going to happen again. So the slowdown in earnings growth in 2019 is really not as big as it seems.

- Jeff Buchbinder – LPL Senior Equity Strategist

Subscribe to the Market Signals podcast series on iTunesGoogle PlaySpotify, or wherever you get your podcasts.

In this week’s Market Signals podcast, our Research strategists preview the upcoming earnings season.

With earnings growth for S&P 500 companies in the mid-teens, the latest corporate earnings season could be a good one. Fueling that expectation is solid economic growth, tax cuts, and sharply higher energy sector profits.

While things are off to a good start overall, it’s early. Financial companies have benefited from improved net interest margins on loans and a pickup in loan growth. However, the fourth quarter was challenging for the capital markets, leading to mixed results. Tariffs and slower growth in China and Europe remain key risks. Expectations for earnings have been lowered, but that could be setting up a likely upside surprise.

Looking ahead, the strategists see solid 6-7% earnings gains to $172.50 per share in S&P 500 earnings. That could support double-digit stock market gains this year. Though earnings growth is slowing, primarily because of the anniversary of the December 2017 tax cuts, a slowdown and contraction are two very different things.

Chart - Energy to Pace Q4 Earnings Gains

Tune in to get our strategists’ take on what could be a strong earnings season. If you haven’t already, subscribe to Market Signals on your favorite digital channel to access future and past podcasts.

If you are a financial advisor, talk to a recruiter to learn how you can affiliate with LPL.

 

_______________________________________________________________________________________________

 

IMPORTANT DISCLOSURES

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.

All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. All performance referenced is historical and is no guarantee of future results.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

This research material has been prepared by LPL Financial LLC.

To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.

The investment products sold through LPL Financial are not insured deposits and are not FDIC/NCUA insured. These products are not bank/credit union obligations and are not endorsed, recommended or guaranteed by any bank/credit union or any government agency. The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible.

Member FINRA/SIPC

For Public Use — Tracking #: 1-813683