Wall Street Improves Earnings Outlook, 21-Week Streak

Analysts at Wall Street have improved their earnings outlook, achieving a 21-week consecutive streak, the longest since September 2021, according to a Citigroup index. Despite concerns about inflation, oil, and interest rates, U.S. companies are gearing up for a new earnings season with solid expectations, following one of the best recent quarters. WTI oil remains above $90 per barrel, while investors consider the possibility of a rate hike by the Federal Reserve next week. Despite a slowdown in the stock market's advance, the S&P 500 is only 1% below its all-time high. Marija Veitmane from State Street Global Markets indicates that market behavior responds more to internal company factors than to the macroeconomic context. Earnings forecasts for the S&P 500 for next year have increased nearly 4% in two months, according to Keith Parker from UBS, reflecting the strength of corporate results. Additionally, the impact of artificial intelligence is beginning to be considered, with Willem Sels from HSBC Private Bank noting that valuations do not yet fully reflect its potential. The challenge will be to determine whether corporate earnings can offset a higher rate environment and elevated oil prices.

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