Chief Investment Strategist
The Q3 earnings season is all about the US technology sector as earnings expectations have risen the most for this sector and carried the indices higher. If technology companies can not deliver against those rising expectations then we are in for setback. The first tests will already come in the week ahead with ASML earnings on Wednesday and Netflix earnings on Thursday. ASML is all about new orders and a positive outlook is critical for the AI theme. Netflix’s earnings are all about improving operating margin and profitability.
Financials are off to a good start with strong earnings and outlook from JPMorgan Chase, but investors should expect some softness during 2025 according to the CFO. Wells Fargo also delivered good Q3 earnings driven by strong performance in its investment banking division offsetting some weakness in its net interest income. Going into the Q3 earnings, the utility and real estate sectors have performed strongly so here investors expect a significant change in the outlook or else we could see a reset of expectations in those two sectors.
The list below highlights all the most important earnings releases in the week ahead:
The recent US inflation report for September showed that the services inflation less energy (also called core services inflation) had its second month of month-to-month gains that are above the 6-month moving average suggesting that inflation is potentially picking up again. This has caused the market to expect fewer rate cuts by June next year and pushed the US 10-year yield above 4% again.
Tesla shares are down 6.5% in German trading as the “Robotaxi” event last night is seen as a distant and unrealistic project. The “Robotaxi” was unveiled as the Cybercab and is expected to cost less than $30,000 with expected production in 2026. Tesla also unveiled a Robovan that can carry 20 people. The production deadline and not least regulatory approval for self-driving cars in the US are big question marks for investors and the reason why for now the verdict is negative.
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