Early
in
earnings
season,
companies
are
beating
but
their
stocks
are
missing,
JPMorgan
says
It’s
early
in
the
second
quarter
earnings
reporting
season
but,
so
far,
the
majority
of
both
U.S.
and
European
companies
are
beating
analyst
estimates
but
the
performance
of
their
stocks
is
lagging,
according
to
JPMorgan.
“Out
of
early
reports,
with
70
S&P
500
results
and
90
in
Europe,
the
majority
are
beating
the
consensus
projections,”
Mislav
Matejka,
head
of
global
and
European
equity
strategy
at
JP
Morgan,
said
in
a
note
to
clients
early
Monday.
“The
sample
set
is
relatively
small,
but
the
stock
price
reaction
to
the
beats
is
worse
than
typical.”
Moreover,
JPMorgan
looked
at
companies
issuing
profit
warnings
ahead
of
second
quarter
earnings,
and
stocks
within
that
group
are
down
10%
or
more,
the
exception
being
some
energy
and
chemical
stocks,
probably
because
of
their
poor
first
half
performance
entering
July.
Bottom
line,
JPMorgan
doesn’t
expect
second
quarter
earnings
to
give
the
market
much
of
a
boost
compared
with
the
first
quarter,
for
a
couple
of
reasons.
“Stock
price
reactions
in
general
could
be
more
muted
this
time,
or
at
least
any
positive
momentum
might
not
have
legs,”
Matejka
wrote.
“Ahead
of
Q1,
sentiment
and
positioning
were
cautious,
but
the
equity
market
was
strong
coming
into
Q2
reporting
season,
suggesting
buyside
expectations
are
more
elevated,
even
as
analyst
projections
are
subdued.
Also,
the
question
is
whether
the
guidances
will
be
raised
on
the
back
of
quarterly
beats,
as
there
was
some
loss
of
momentum
as
we
moved
through
the
quarter,
and
China
dataflow
continues
to
disappoint.”
—
Scott
Schnipper,
Michael
Bloom
Stock
futures
open
flat
Monday
U.S.
stock
futures
opened
little-changed
Monday.
Futures
tied
to
the
Dow
Jones
Industrial
Average
shed
just
5
points,
or
0.01%.
Meanwhile,
S&P
500
futures
and
Nasdaq
100
futures
ticked
up
0.02%
and
0.03%,
respectively.
—
Hakyung
Kim
