U.S. Stock Market Earnings Forecast Over The Bull Market Will Continue

The rise made investors worried about the third quarter earnings of the US stock market.

However, the third quarter earnings report is coming to an end. From the performance, the US stock listed company still handed out a good answer.

Investors who are concerned about US stocks may all know that the second quarter of US stock market performance has been suppressed in the first quarter.

There has been a sharp rebound.

However, the second quarter earnings report also raised expectations for the third quarter earnings. Meanwhile, since July 1st, the US dollar index has risen by an alarming 10.14%. Analysts worry that the US dollar's rise will affect the performance of many overseas revenue companies.

Prior to this, CantorFitzgerald analyst Joseph Squli (YoussefSquali) pointed out that due to the continued appreciation of the dollar, some Internet Co's fourth quarter performance is expected to be lowered.

According to Scully's judgment, Internet Co, such as Google, Facebook, Priceline, Amazon and eBay, will be affected by the appreciation of the US dollar.

Among them, according to the second quarter earnings report, Google and Facebook's overseas business revenue has accounted for 55% of its total revenue, and the calculation results show that the appreciation of the US dollar will reduce Google's third quarter revenue by 175 million US dollars and earnings per share by 16 cents.

If the US dollar maintains the current exchange rate, Google's fourth quarter profits will be reduced by 465 million US dollars and earnings per share will be reduced by 22 cents.

For Facebook, its third quarter revenue decreased by $20 million, and sales and profits in the fourth quarter could also be reduced by $95 million.

For Amazon, because of its overseas

Its share of total revenue is 40%, so the impact of the US dollar appreciation is not as strong as that of Google and Facebook.

But even so, the estimated results show that the third quarter revenue will also decrease by $183 million, earnings per share will be reduced by 1 cents, while the fourth quarter revenue will be reduced by 824 million US dollars and earnings per share will be reduced by 3 cents.

However, judging from the published earnings reports, the performance of the listed companies is still excellent.

SijuDaniel, President of FXCM, said that in terms of foreign exchange, those companies with larger overseas revenues would have corresponding foreign exchange hedging plans, and even some of the listed companies would have teams to do so.

Therefore, the appreciation of the US dollar will not cause a great fluctuation in the actual performance of the company.

Daniel points out that, as far as I know, Microsoft has set up a team with corresponding hedging strategies against foreign exchange fluctuations, and the members of the team are heavily hired by Microsoft from banks and other institutions.

Their main task is to keep an eye on a certain exchange rate fluctuation, and then set the appropriate price at the right place to hedge the risk of foreign exchange fluctuation to performance.

Daniel said in Google's earnings report. In Google's revenue analysis, it has repeatedly mentioned the relevant benefits of the foreign exchange risk management plan. That is to say, if the foreign exchange risk management plan is not adopted, if the exchange rate is flat in the same quarter, Google's third quarter revenue will increase by US $66 million; if the exchange rate is flat with the same period last year, Google's revenue will be reduced by 106 million US dollars.

But the actual situation is that the US dollar index is close to the level of the same period last year. That is to say, the direct loss of Google's foreign exchange revenue is US $106 million, and the foreign exchange risk management plan is very likely to make up for the loss or even a slight surplus.

According to Thomson Reuters data, the listed companies of the S & P 500 share index reported earnings increased by 4.84% over the same period last year, and net profit increased by 11.13% over the same period last year, all higher than market expectations.

Analysts said that with the gradual recovery of the US economy, the performance growth of US stock listed companies will continue to maintain. This will also push the stock market to continue to rise, while the US stock repurchase process has not slowed down, so the US stocks in the fourth quarter and early next year will still be in the bull market.

MacNeilCurry, a technology analyst at Bank of America Merrill Lynch, said: "most of the fund's performance is inferior to that of the big market. With the advent of the fourth quarter, many performance gains will be seen.

We expect that those risk appetite investors will get a good return in the four quarter and the first quarter of next year, especially in the stock market.