Home etftrends.com BIG NUMBER 14.6%: Investors Raise the Bar for First Quarter Earnings

BIG NUMBER 14.6%: Investors Raise the Bar for First Quarter Earnings

Those jumps in investors’ expectations for corporate America could be a bit of a double-edged sword. Higher estimates are a sign of strong sentiment, but the more earnings estimates are raised, the tougher it becomes for companies to top those expectations. Since Wall Street can often reward companies that beat forecasts—and punish those that meet expectations or disappoint—we’ll be looking closely at how investors reprice various stocks after earnings are released.

For now, it appears investors remain amped up about the prospects for the Mag 7 stocks. Ideally, they’ll also reward 1Q earnings beats for other S&P companies—which would signal that the market’s returns are broadening out beyond just a handful of tech stocks. Indeed, if expectations for Fed interest rate cuts continue to wane due to sticky inflation, real underlying corporate earnings growth may emerge as the main driver of where equities could go from here.

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