Latest / Markets with Megan: A Quick Financial Markets Update / 022: Earnings Season Kickoff 07-17-23

Transcript

022: Earnings Season Kickoff 07-17-23 · Markets with Megan: A Quick Financial Markets Update

• 0:04
  Megan Horneman: Hello, this is Megan Horniman, the Chief Investment Officer for Verdin's Capital Advisors and coming to you today with our Markets.
• 0:10
  Megan Horneman: With Megan, we've seen the earnings season kick off this week.
• 0:14
  Megan Horneman: This morning we got some of the big banks that kicked off, which typically is how we start our earnings season.
• 0:20
  Megan Horneman: The estimates for S&P 500 earnings for this quarter are for them to decline at the fastest pace we've seen since the pandemic.
• 0:27
  Megan Horneman: The headlines you're going to see today are that the financials which came out this morning were better than expected, and, yes, that is the case.
• 0:35
  Megan Horneman: We had some decent earnings from the financials.
• 0:38
  Megan Horneman: But what we want to do is delve into what those financial companies telling us about the health of the consumer, and one of the companies, specifically Citigroup, made several comments about the increase that we're seeing in credit card debt and the usage from consumers, and then, specifically, the amount of money they're having to absorb for an increase in delinquencies for these credit cards.
• 0:59
  Megan Horneman: So this is the while you're going to read that the reports were good from an earnings perspective.
• 1:03
  Megan Horneman: Yes, interest rates are higher, so banks are making more money off of what we call net interest margins, where they can pay lower rates and then lend out and get higher rates in return.
• 1:15
  Megan Horneman: But we're looking at the underlying trends that we're seeing from what banks are telling us about the economy and the consumer.
• 1:21
  Megan Horneman: So consumer still is in a very difficult situation with high inflation, so we're going to continue to watch this.
• 1:29
  Megan Horneman: We'll get a bunch more earnings in the next couple of weeks where we can get a better gauge of what's going on with the economy, but at this point the earnings season has started off pretty strong and that's a positive, and we've seen that in the equity markets today.
• 1:41
  Megan Horneman: That's all I have.
• 1:43
  Megan Horneman: If you have any questions or comments, please feel free to reach out to podcastadverdencecom.