Why this earnings season will drive a 'muted market reaction'

Published On Oct 8, 2024, 10:50 AM

The upcoming earnings season is projected to see a growth in earnings of 4.7%, marking five consecutive quarters of growth, yet it is expected to be the slowest increase since Q4 2023. Analysts suggest that the already high stock prices and volatile macroeconomic issues including geopolitical tensions and economic forecasts will dampen the typical positive market reactions usually observed during earnings seasons. Concerns regarding a potential drop in stock prices during election years are also raised, with historical data supporting this claim. Despite the muted expectations, strategists note that potential positive catalysts could emerge depending on company outlooks and Federal Reserve interest rate decisions.