A New Round Of US Stock Market Earnings Season Opened, Many Large Enterprises Exceeded Expectations.

With the release of the earnings of several large enterprises, a new round of US stock earnings season officially began. Before the closing of the US stock market on Tuesday, 11 top 500 companies released their results. Most of the companies such as J.P. Morgan, United Health and Johnson performed better than expected. Only Goldman Sachs and Wells Fargo were not as good as expected.

On this day, the three major indexes of the US stock index rose collectively and the Dow Jones industrial index returned to the top 27000 points. Some people in Wall Street pointed out that the new round of earnings season started well. However, from the overall profitability level, Wall Street's performance expectations for US stocks in the third quarter are not high. Analysts expect that the overall earnings of the S & P 500 index will drop by 4.6% in the three quarter of this year, according to FactSet, a financial data company.

Many big companies have better financial results.

On Tuesday, local banks announced the latest performance. Among them, J.P. Morgan was strong, with a record high of $30 billion 100 million in the three quarter, pushing its share price up 3% and a record high. Thanks to the lower effective tax rate and higher income, Citigroup's net profit in the three quarter amounted to US $4 billion 900 million, up 6% from the same period last year, and the earnings per share in the three quarter were US $1.97, which is higher than the 1.95 US dollars expected by the market.

However, Goldman Sachs delivered less than expected earnings, net profit of $1 billion 880 million in the three quarter, down 26% from the same period last year, and earnings per share declined by 24% to $4.79, down from analysts' expectations of 4.81 US dollars, and investment banking revenues of $1 billion 690 million, or less than the expected US $1 billion 720 million. Dragged down by Goldman Sachs, Goldman Sachs fell more than 3% on Tuesday, closing down.

Wells Fargo Bank, which was deeply bogged down in the false accounts scandal, was also less than expected. Its net profit of ordinary shareholders in the three quarter was $4 billion 37 million, less than the $5 billion 503 million expected by the market, lower than the $5 billion 453 million of the same period last year, and its earnings per share were 92 cents, less than 1.14 dollars expected by the market. But investors have positive expectations of the new CEO Charles Schaaf (Charles Scharf) who will take office next week, pushing the stock up or down by 1.6% on Tuesday.

In addition, the performance of the joint health group was strong and its share price rose 8.2%, the largest single day gain in ten years. According to the results of the report, the three quarter earnings per share of the joint health sector benefited from the growth of the pharmacy revenue, which was 3.88 US dollars, which is 13 cents higher than the analyst's expected $3.75. At the same time, the company also raised annual revenue guidelines.

Johnson's revenue and earnings per share exceeded analysts' expectations, mainly due to the growth in sales of cancer and other prescription drugs. In the three quarter, Johnson's earnings per share were US $2.12, which was higher than the average of US $2.01 of analysts surveyed by Refinitiv. Johnson also raised its annual performance guidelines.

On Wednesday, local banks, Nye, IBM, Alcoa, Abbott, Bank of America and Mei Long Bank of New York released the latest results. As of press release, the Bank of America has announced the latest financial results, the same performance than expected. In the three quarter, the net profit of Bank of America increased by 4% to 7 billion 500 million US dollars, adjusted 75 cents per share, and net income fell to 56 cents per share after the closing of the cooperation relationship with First Data, but still exceeded the Refinitiv analyst's expected 51 cents.

Key technology and medical sector

According to The Earnings Scout, 26 of all 34 S & P 500 companies that have reported three quarter results have achieved positive growth in earnings per share. (Earnings) That is to say, as of now, there has been no obvious sign of profit decline in enterprises that have disclosed their earnings.

The Earnings Scout chief executive Ricci (Nick Raich) analysis pointed out that before the arrival of each earnings season in 2019, the market consensus was negative growth in earnings. "But as we can see now, the performance of the company is better than that of the market."

Ricci believes that concerns about global economic growth and Sino US trade friction have led to concerns among companies and analysts, giving a very conservative profit forecast. In his view, (Ying Li) the trend of slowing down is positive, but it is not as bad as expected. He expects that when all the S & P 500 shares are disclosed, the level of earnings will be flat this quarter.

Informa Financial Intelligence's market strategist Ryan Nauman also believes that despite the relatively optimistic start of the earnings season, with the performance of more multinational companies, manufacturers and technology companies, I am afraid it will not be smooth sailing. On the whole, he believes that profits will eventually be better than expected in the current quarter, but he will not be surprised if the profit decline finally lasts until another quarter.

According to Factset's previous statistics, as of the end of the three quarter, 82 of the S & P 500 constituent companies that have announced quarterly earnings forecasts have issued negative earnings guidelines, while 31 have issued positive earnings guidelines. Among them, the number of companies issuing negative guidelines exceeded the five year average of 74, and the number of companies issuing negative guidelines was 500.

In terms of industry, the number of Companies in information technology and healthcare industries increased most significantly. In the field of information technology, 29 companies issued negative three quarter earnings guidelines, which is nearly 45% higher than the 5 year average of the industry. Among them, the number of semiconductor and semiconductor equipment and software industry companies is the largest, with 9 and 7 respectively. In the field of health care, 15 companies issued negative three quarter earnings guidelines, 40% higher than the 5 year average of the industry. Among them, the largest number of companies from health care equipment and supplies, reaching 9.