July has arrived, kicking off the month of earnings season. Companies are still trying to pull out of the gloom that has hit the global economy over the past 3 years. The total number of companies that have gone bankrupt to date in 2023 is higher than at any time since 2010 with the highest filings in the consumer discretionary and industrials sectors, according to S&P Global, as shown below.
Figure 1: US bankruptcy filings by year based on S&P Global Market Intelligence (June 2023)
For Q2 of 2023, earnings are estimated to decline for the S&P500 by 7.2%, representing the largest decline since Q2 of 2020. Almost 60% of the companies in the S&P500 that issued earnings guidance for the quarter were negative EPS guidance. However, on a positive note, Q2 has seen the highest number of companies issuing positive EPS guidance for a quarter in almost 2 years, according to Factset.
It is important to watch the companies’ earnings as it reflects the conditions of the market whether from a producer or a consumer viewpoint. Next week, major companies from the financial sector are expected to post their earnings. Here are the company earnings expectations you should watch out for.
*Expectations are based on Nasdaq.com as of 12/07/2023
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