US companies are delivering better reports on their earnings and revenue than expected. They do this at the highest pace since 13 years.
Does this, however, lead to an increase in indices? Not exactly ... Although it is generally believed that the results of companies are the source of index growth.
Company profits rose by 9% yoy, exceeding the average growth expectations of 3%. Sales grew by 5% yoy. 55% of companies with sales on international markets have exceeded expectations in terms of profits and sales, compared with 30% for companies represented only in the United States.
In fact, there is the first case since the 2000s when investors saw no "prize" for better results, according to Bank of America Merrill Lynch.
This is a "potentially dangerous" anomaly we have not seen since 17 years, according to analysts from Bank of America Merrill Lynch.
This lack of reaction may be another sign of the late stage of the upward cycle we are in, according to Savita Subramanian, a bank analyst.
This does not mean that the situation is too negative at the moment. It seems, however, that this growth in the companies' results was apparently already in the levels.
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