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Earnings momentum builds this Q2 | UBS Trending Extra · UBS Trending

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  You are probably
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  thinking
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  same old story lines or things have cooled over the summer,
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  but underneath the surface there seems to be something brewing.
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  All eyes will be on the second quarter earnings season.
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  Why? So here are two questions.
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  What are our expectations for the second quarter earnings season?
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  And what will we be paying attention to?
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  At a high level, we are expecting S&P 500 corporate profit growth
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  to accelerate to 28%,
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  which would be the fastest pace in more than four years.
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  And there really aren't too many times in the history
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  where we see this type of growth rate outside of recessions.
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  And while semiconductor stocks are contributing significantly,
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  this isn't just a tech story,
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  as we expect profit growth to be broad based,
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  supported by improving manufacturing activity and resilient
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  consumer spending, which should help drive further upside
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  in other segments of the market as well.
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  We also think that corporate guidance should generally
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  be constructive.
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  Businesses are still seeing healthy demand.
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  Manufacturing trends are improving, and companies
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  wouldn't be as committed as they are to investing in AI.
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  If the demand and adoption
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  wasn't still there for many quarters to come,
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  I mean, one way to look at it is a lot of people today
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  have decided to stay in their current homes rather than move.
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  Given the level of mortgage rates, the renovation itself
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  may still be expensive, but once it's complete,
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  you do benefit from a more valuable and functional home
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  for years to come.
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  So, putting it all together,
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  we believe that
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  second quarter results
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  will help generate further upside for stocks.
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  So make sure to continue
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  to tune into UBS Trending throughout the summer, as I'll be back
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  at the end of the second quarter earnings
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  season to discuss the key takeaways.
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  And for more on our latest views, please see our report.
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  Earnings firing on All cylinders and visit ubs.com/cio.