Latest / Markets with Megan: A Quick Financial Markets Update / 026: Second Quarter Earnings Season 07-24-23

Transcript

026: Second Quarter Earnings Season 07-24-23 · Markets with Megan: A Quick Financial Markets Update

• 0:05
  Megan Horneman: Hello, this is Megan Horneman, the Chief Investment Officer for Verdance Capital Advisors, coming you you with Markets with Megan, what we're going to do is give a little bit of an update on what we're seeing thus second-quarter earnings season and then a preview of the companies that are coming out this coming week.
• 0:20
  Megan Horneman: So last week we concluded the second week of earnings season.
• 0:23
  Megan Horneman: The S&P 500 earnings are still expected to decline by the most that we've seen since the pandemic, but earnings season has been mixed.
• 0:31
  Megan Horneman: We've had some better reports, especially in the financial side, the big financials but we have about 60% of the companies that are beating their earnings per share estimate.
• 0:41
  Megan Horneman: We only have roughly 90 of the 500 companies that have reported thus far.
• 0:46
  Megan Horneman: The bulk of it is going to be this coming week.
• 0:48
  Megan Horneman: But here's the key takeaways that we've seen out of the financials and a couple of the tech and discretionary names.
• 0:56
  Megan Horneman: First of all, there is still concern about the consumer.
• 0:59
  Megan Horneman: The consumer is not as solid as some of the headline and economic data shows.
• 1:03
  Megan Horneman: We're seeing that with some of the big banks and credit card companies increasing loan loss reserves for credit, for consumer credit, and we're actually seeing them taking losses already for delinquent credit cards.
• 1:17
  Megan Horneman: From a business perspective, the big banks are increasing their loan loss provisions, meaning that they're expecting more companies to default.
• 1:26
  Megan Horneman: The banks, the small and mid cap banks we got some information out of them and we're seeing that they're going to struggle for a while with an increase in regulations and now they're trying to repair their balance sheets.
• 1:38
  Megan Horneman: So there's no room for error there from a small and mid cap banking perspective.
• 1:44
  Megan Horneman: And then, lastly, we've seen margins are still a concern.
• 1:47
  Megan Horneman: We saw that with some of the companies that have reported this this far.
• 1:51
  Megan Horneman: So there's the four key takeaways we've gotten just out of what we've seen thus so far.
• 1:56
  Megan Horneman: With earnings season, this week is by far the biggest week.
• 1:59
  Megan Horneman: We get about 150 companies in the S&P 500 report earnings.
• 2:04
  Megan Horneman: It's about 40% of the market cap, and they're the big names that could be market-moving: Microsoft, Alphabet, Meta, Visa and even some of the energy companies with Exxon.
• 2:17
  Megan Horneman: So keep your eye out.
• 2:18
  Megan Horneman: We'll be back to give you some more updates around what we see from earnings season.
• 2:24
  Megan Horneman: If you have any questions or comments, please feel free to reach out to podcast at verdence.
• 2:28
  Megan Horneman: com.