The biggest negative for the earnings season will be the impact of further tightening of financial conditions, said 42 per cent of respondents. Bets remain high for thein July, after Friday’s data showed moderating payrolls, but stronger-than-expected wage growth in June.
The earnings season kicks off in earnest on July 14, when JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. report. Some 53 per cent of respondents in the survey expect earnings at lenders to disappoint, with this reporting season set to confirm a deterioration in the sector’s outlook and hurt bank stocks.Article content
While the tech rally was boosted by the hype around artificial intelligence, over 70 per cent of survey participants say the impact from AI on tech earnings is overblown. That leaves companies leading the AI push, such as Nvidia Corp. and Microsoft Corp., more vulnerable to stock declines if their earnings disappoint investors.Article content
Amid the gloom, the biggest positive drivers for equities will be any signs of easing inflation and cost cutting, according to the majority of those surveyed.