Yahoo chief executive Marissa Mayer is one of the several technology company chief executives to report improved earnings this week. Photo by Reuters.
Second-quarter earnings from United States listed companies
were likely to have the largest impact on markets this week,
Craigs Investment Partners broker Chris Timms said yesterday.
Alcoa and Wells Fargo, among others, started things off last
week but this week, about 55 Standard & Poor's 500
companies will report.
Citigroup, Goldman Sachs, JPMorgan, Bank of America, Morgan
Stanley and Blackrock were the financial companies expected
However, there was also a healthy showing of high-profile
technology companies such as Google, IBM, Intel and Yahoo all
due to report, he said.
Overall, second-quarter earnings were expected to grow about
6%. Financial companies were expected to be the weakest and
technology stocks the strongest.
The technology sector had the highest projected earnings
growth rate among the 10 S&P sectors for the second
quarter at 12.3%, its best quarter since the first quarter of
2012. The forecast marked a strong rebound from a drop of
3.2% just a year ago, Mr Timms said.
The Dow Jones Industrial Average and the S&P 500 had both
hit record highs recently but the technology-rich Nasdaq was
still 700 points away from its intraday high on March 10,
2000, suggesting to some investors the sector might have more
room to the upside.
Analysts were expecting subdued results for financial
companies because a slow down in revenue from mortgage
refinancing and trading was offsetting gains from other
areas, such as investment banking and money management, he
''A bigger focus will be on the outlook for the second six
months of the year. Most people are expecting a strong bounce
in activity, with earnings growth estimates for the second
half rising to more than 10%.''
With equity markets close to all-time highs, a disappointing
earnings season was one of the largest risks in the immediate
future, Mr Timms said.
Also tomorrow, Chinese economic growth figures for the June
quarter were due, he said.