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Investopedia
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Big banks will kick off earnings season tomorrow with results that could set the tone for what some analysts are expecting to be a lackluster round of reports. But some experts say that might not be such a bad thing for investors.
The consensus on Wall Street is that the S&P 500 as a whole will report growth slowed to 4% from 11% in the prior quarter, according to analysts at Bank of America. That would be the most pronounced deceleration in two and a half years.
Analysts lowered their expectations throughout the quarter as economic data pointed to a softening labor market, a threat to consumer spending, the engine of the U.S. economy. From the start of the quarter to its end, analysts lowered their S&P 500 aggregate earnings estimate by nearly 4%. While it's normal for Wall Street to scale back earnings estimates, a 4% reduction is above the 5-year, 10-year, and 15-year averages. Tech is the only sector for which Wall Street has raised its expectations.
With the bar lowered, the stage could be set for stocks to pop on better-than-expected results.
“As long as companies have managed through macro headwinds and see early signs of improvement from lower rates, stocks should get rewarded,” wrote BofA analysts. They estimate that Wall Street has overestimated the impact disappointing macroeconomic data will have on corporate earnings, and expect S&P 500 earnings to top estimates by about 2 percentage points.
Thus far, S&P 500 companies are beating earnings estimates at an above-average rate, with more than three-quarters topping earnings per share estimates. And they're beating estimates by a wider margin than the previous quarter (3.5% vs. 1.7%). Though, with only 21 companies having reported at the time of BofA's note, that fact should be taken with a healthy grain of salt.
Investors will likely place as much if not more importance on a company’s outlook than its past results, and there’s reason to expect more optimism now that the Federal Reserve has begun easing policy.
Earnings in rate-sensitive industries like manufacturing and housing should recover in the coming quarters if rates continue to decline, says BofA. That recovery could have an outsized impact on the S&P 500’s earnings. BofA estimates goods-focused businesses account for half of the index’s profits but only 20% of U.S. GDP.
The outlook could also be brightened by forecasts of more robust capital expenditures (CapEx).
Artificial intelligence capex could also flow through to corporate earnings. Tech giants Microsoft (MSFT), Alphabet (GOOG; GOOGL), Amazon (AMZN), and Meta (META) are expected to spend more than $200 billion on infrastructure this year, with much of that spending dedicated to AI. That spending was a thorn in these companies' sides last quarter when investors balked at AI's hefty price tag. CapEx jitters could weigh on mega-cap tech stocks again this round, but it could also boost the revenue of relevant companies across the technology, utilities, and industrial sectors.
The remainder of the S&P 500 is on track to decrease its CapEx by 1% this year. Companies have been discouraged from making big investments by both elevated borrowing costs and the uncertainty surrounding November's presidential election. BofA notes that, historically, investment activity picks up significantly after elections when executives have a clearer picture of the outlook on taxes, trade, and regulations. That CapEx boost could be exacerbated this year by falling interest rates.
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Instablog9ja
1 h
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Actor Yul Edochie has revealed that he believe in President Tinubu, and he believed he will fix Nigeria.
He said this as he advised Nigerians to be patient and all will be well with our country.
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Your Face, The Only Access – OPay Develops Large Transaction Shield To Ensure Security For You
Instablog9ja
2 hrs
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Investopedia
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The older a woman gets, the longer she expects to work.
A recent survey from Northwestern Mutual found that Boomer–and older–women anticipate retiring at age 71. That’s older than women in Gen Z and millennials, who expect to retire at age 62 and 64, respectively.
The changes reflect evolving visions and understanding of what women expect from life as they age. As they move closer to retirement age, according to Northwestern Mutual Wealth Management Advisor Denise Beaulier, women may worry more about money, revising their expectations about when they'll retire.
"As people approach or enter retirement, some may lower their expectations for what they will realistically be able to afford based on what they currently have saved," Beaulier said in emailed comments.
The women Northwestern Mutual surveyed had an average savings goal of $1.5 million. (That, according to the guideline known as the 4% rule, would suit someone who expected to have annual expenses around $60,000 in retirement.) Younger women had higher targets for their retirement savings than did Boomers–and more optimism about their ability to reach them.
Roughly 60% of GenZ (those typically born between 1997 and 2012) women surveyed said they expect to be financially prepared for retirement, much higher than 40% of GenX women, who are between 44 and 59 years old.
Recent research from Fidelity indicated that Gen Z women are more likely to invest outside of retirement (38%) compared to women overall (28%).
"The youngest generation of women is setting ambitious financial goals, and with their rising incomes, side hustles and early investing, they may have the financial fuel they need to reach them," said Northwestern Mutual Chief Product Officer Kamilah Williams-Kemp.
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Instablog9ja
3 hrs
10
The federal government said with the new curriculum set to roll out for Basic and Senior Secondary Education in Nigeria, every student must graduate with at least two skills.
The Minister of Education, Prof Tahir Mamman who stated this said the new curriculum is designed to incorporate knowledge, skills and values at Basic and Senior Secondary Education levels.
He stated this at the 68th National Council on Education (NEC) meeting in Abuja on Thursday, with the theme, “Innovation, Digital Technology Entrepreneurship: Tools for Educational and National Development in the 21st Century. “He said the new curriculum is designed to incorporate knowledge, skills and values, especially with a special focus on skills, so that students, when they graduate, will have skills that they can connect with the economy and have a productive life.
He explained that today, they share a common challenge that the country’s educational curriculum is all in danger of becoming obsolete as technology is disrupting every industry, including education. “A well-designed and effective curriculum determines a sustainable development, quality, and the relevance of education. This is the main reason why this administration places priority on the institutionalisation of curriculum development in the overall context of education,” he said.
The ministry, according to him, is implementing the Education Transformation Agenda of Mr. President designed to comprehensively overhaul the education sector to ensure quality learning, skill development, access and equity. Prof Mamman reaffirmed that government has the primary responsibility of protecting and ensuring inclusive and equitable quality education at all levels for all learners.
“The government therefore, is committed to observing all relevant international protocols, conventions and treaties for the protection of our learners, teachers, learning institutions and facilities from atta3k and any other instrument on education, which the country has domesticated.”
Earlier, in his welcome address, the Minister of State for Education, Dr Tanko Sununu said any nation that is desirous of growth must in essence embrace the new culture of creative ideas, entrepreneurship and the use of digital technology. He said: “To meet the challenges posed by new technological development, we must ensure that the educational system is structured and made more relevant to the needs and aspirations of the society.”
Sununu noted that new and relevant ideas must be injected into the system to enhance national development, adding that education at all levels needs renewal in order to meet up with the present globalisation.
Also, the Chairman Senate Committee on Tertiary Institutions and TETFund, Muntari Mohammed said digital literacy must be a fundamental component of the curriculum, adding that their leadership remains focused to ensure stability in the education sector.
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Instablog9ja
4 hrs
13
Six of the 11 journalists reportedly kidnapped while travelling to Uyo, Akwa Ibom State through Anambra State to cover the Super Eagles’ game against Libya have been rescued by security agents.
The journalists were said to have been abducted on Wednesday on a bus travelling through Isseke, near Ihiala Local Government Area of Anambra State.
However, it is reported that one of the journalists was shot d£ad by the kidnappers during the atta3k
Confirming the incident, the state police spokesperson, SP Tochukwu Ikenga, stated, “Joint security forces have successfully rescued six members of the media crew who were abducted while travelling from Lagos to Uyo along the Isseke-Orlu Road in Ihiala. Operations are still ongoing for the possible rescue of a seventh crew member. Further developments shall be communicated.”
In response to the situation, the National Secretariat of the Sports Writers Association of Nigeria issued a statement by Ikenna Okonkwo, urging state chapters to provide the full list and identities of their members covering the Super Eagles’ qualifying match. “Following the rumoured kidnap of some sports writers said to be on their way to Uyo to cover the Super Eagles match against the Mediterranean Knights of Libya, we urge the state chapter leaderships to immediately furnish the national secretariat with any necessary information regarding any SWAN member who might be involved.
At the moment, the SWAN President, Mr Isaiah Benjamin, and indeed the National Executive Committee are committed to the welfare and well-being of members and have been inundated with calls on the situation, but nothing has been confirmed yet,” the statement read. The association also advised members to always inform their local secretariats of their movements during critical times such as this in Nigeria.
