A strong earnings season looks likely to help restore market confidence – UBS By Investing.com

A strong earnings season looks likely to help restore market confidence – UBS By Investing.com

The current earnings season is shaping up to be a pivotal moment for market sentiment, according to UBS analysts. Amid a flurry of earnings releases, UBS remains optimistic about the potential for strong corporate performance to bolster investor confidence in the markets.

This week marks an important period, with around 180 companies reporting their results, including notable members of the Magnificent 7. UBS notes that the outcome of these earnings announcements could play a crucial role in restoring market confidence.

Tesla (NASDAQ:), which stood out during this earnings spree, saw its shares rise after hours despite a lack of earnings. Investors have responded positively to Tesla’s plans to accelerate the rollout of new, more affordable vehicle models. This reaction underscores the market’s appetite for forward-looking growth strategies, even amid near-term financial results that may fall short of expectations.

Overall, the results so far match UBS’s optimistic forecasts. The company continues to forecast earnings per share growth of between 7% and 9% for the S&P 500 during the quarter, positioning the market for a solid 9% increase in earnings throughout 2024.

Looking ahead, UBS “expects April to be a soft patch for markets, with the S&P 500 still on track to end the year around 5,200, up from 5,070 at Tuesday’s close.” .

UBS also maintains a favorable outlook on small-cap stocks, seeing them as poised to rebound once interest rates begin to fall and earnings growth accelerates across the market.

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