The interest of the Federal Reserve are some of the reasons that have made investors believe that US companies were going to give up at the end of the second quarter of the year. However, although the deterioration of the business in several companies within the S&P 500 can be appreciated, in the quarter the truth is that the data reflects that the market forecasts to date.
More than half of the companies in the S&P 500 have already published their accounts until June included (282 companies at the close of the European markets on Monday) and 74% of all these companies in the index have presented better profits than those expected by the market, according to Bloomberg. This means that, to date, the main index of than was expected before the end of the second quarter and is on track to achieve 5.9% more than the previous quarter. The same fate befalls sales: 170 companies have exceeded the market forecast (more than 60%) compared to 75 companies that did not and 36 that sold as expected.
It is true that there are still companies to publish the accounts for the second quarter of 2022, but most of the heavyweights in the North American market have already cleared up their unknowns. “With the business results season well advanced, we can already say that the companies of the “”, point out from Bankinter’s analysis department. “The results season is not being a disaster as feared a few weeks ago,” they synthesize from the eToro analysis department.
And it is that many of the market projections at the end of last month reflected the fear of investors. “The high rates of inflation, without a doubt, were going to harm sales and, above all, profit margins. This uncertainty is, perhaps, the main reason why the flows did not end up going to certain sectors or indices stock markets that had had the worst semester in recent decades”, they point out from Unicorp Patrimonio.
The truth is that enough results have been published by sector within the S&P 500 to show which of them have managed to mitigate the effects of the price rise, among others. The balance shows us the telecommunications and energy sectors as the ones that have taken the most advantage of the market consensus forecasts: 15% and 10% more, respectively. However, of the eleven sectors into which the selective companies are divided, nine have overcome the negativity of the market and only two (the index’s technology and real estate) are below.
The ‘telecos’ resist
The telecommunications sector has been characterized by the resilience it is showing in the face of , marked by central bank policies to mitigate runaway inflation and supply constraints. About 70% of the companies, including the large companies in the sector such as T-Mobile, Juniper or AT&T, close the first half of the course increasing margins. Similarly, energy companies, including oil companies, have been helped by an environment in which fuel is getting most of the blame for inflation on a global scale.
Companies dedicated to the health sector can celebrate, for the time being, closing the second quarter of the year on a positive note and with . 77% of the sector, with 31 of the 59 companies published, presents a profit almost 8% more than forecast by the consensus of analysts collected by Bloomberg. In particular, the prize in the sector goes to the pharmaceutical companies, with a full positive so far (so far they have presented 6 of the 11 companies that are in the S&P 500).
Spending by American consumers on drugs against Covid-19 does not seem to have diminished over time and allows it to continue in favor of pharmaceutical companies, according to a report by Bloomberg, and grows 3% more than expected with none loss in this section. The companies that have most surprised analysts have been Pfizer and Merck. Moderna is currently among the top 50 stocks in the S&P 500 by market consensus.
banking triumph
The financial sector has already shown most of its cards and the rise in rates by central banks seems to date. 68% of the companies in the financial sector closed the month positively, 3.30% better than expected. In the case of banking, we can already see the balance of the 19 companies belonging to this sector. Two thirds improve their benefit above that projected by the consensus collected by Bloomberg.
Technology companies may have advanced in the stock market in July more than other sectors thanks to the boost from the results of giants such as Alphabet, Amazon or Apple. Some accounts that reflected “good figures” in general lines, as pointed out by the executive president of Renta4, Juan Carlos Ureta, which excludes Meta. But the firms in the sector within the S&P 500 are a total of 59 and although to date they have been higher, the truth is that the weight of giants such as Meta or Intel weigh down the benefits of technology companies 3% below estimates and 0.5% in the case of sales.
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