Reporting Season Preview: Positive Double Digit EPS Growth Forecast

We forecast positive double-digit growth in revenue, operating profit, and earnings per share for the upcoming reporting season

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Global Stocks Rise, Bar Japan

Most global indices rallied on corporate earnings, while Japan’s Topix slumped -2.1%.

US stocks climb on corporate earnings

US stocks advanced amid investor optimism over corporate earnings. At the time of writing the S&P 500 and the Dow Jones Industrial Average had gained +0.3%. Of the S&P 500 members that have already released results this season, 73% beat profit projections and 49% topped sales estimates. Factory orders jumped +2.1% in March, the biggest gain since July. Investors are watching the data for clues as to when the Federal Reserve will start raising interest rates.

Comcast advanced after increasing its stock buyback. Berkshire Hathaway climbed +1.7% following its AGM weekend and as lower fuel prices helped boost profits in its railroad business. Cognizant Technology Solutions rallied +8.4% after it raised its full-year revenue outlook. McDonald’s slipped -1.0% as the fast-food giant unveiled its turnaround plan.

European and UK stocks rebound 

European stocks rebounded after their biggest weekly loss since December, as data showed manufacturers raised prices for the first time in eight months. The Stoxx Europe 600 climbed +0.6%. Syngenta jumped +8.1% after speculation Monsanto approached the Swiss maker of crop chemicals about a takeover. Adidas rose +2.9% following a report that its chief executive officer opposes selling off Reebok as a separate company.

The London Stock Exchange closed for the May Bank Holiday.

Asian rise, Japanese slump

Asian stocks outside of Japan gained for the first time in four days amid speculation China will add to monetary stimulus after a manufacturing gauge weakened. The MSCI Asia Pacific Index gained +0.2%. Shimao Property Holdings climbed +8.6% amid a surge by Chinese real estate developers. 

Japan’s Topix tumbled -2.1% after the Bank of Japan refrained from boosting record stimulus and after the Federal Reserve kept interest rates on hold as data showed the world’s biggest economy barely grew last quarter. Honda Motor slid -6.7% and Shin-Etsu Chemical slid -7.0% percent after reporting profit that missed estimates.

ASX 200 

The ASX 200 advanced +0.2%.

Crude, gold 

WTI crude fell -0.6% to US$58.77 while gold rose +0.8% to US$1,188.37

 

Today’s Events

RBA Board meeting outcome (4:30pm NZT)

ANZ 1H15 result

ATR Trading ceases

 

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