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Richard Peterson, Standard & Poor’s valuation & risk strategies director, weighs in on what’s ahead this earnings season.
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Except those shots.
-- third quarter earnings season kicks off today and for the first time in three years S&P 500 companies are on average expected to post a -- -- -- in profits from last year.
Joining us with more on this Richard Peterson -- -- -- -- -- director of global markets intelligent group.
Richard I'm so glad you're with us your report was so intriguing to me but first of -- I mean this is obviously a -- awful state of the economy to say that were basically expecting everyone to port report that they didn't do great.
Well just facing what we're seeing again from what the a survey of and other analysts forecast the consensus -- -- -- negative.
01 point 2% decline quarter.
For third quarter from the year ago I think gun yeah I think in the context we've been on -- road before but I mean when we kicked off the second quarter.
Earnings season the expectations were for about a 11 point 8% decline.
In profits that quarter.
And when -- the company -- reported at that time.
We -- -- a slight positive gain for earnings for the second quarter so looking at the third quarter numbers again we look -- at the -- state.
Putting so we're seeing a positive trend I I I -- stressed the fact that when we started.
BQE two three announced back in September 12.
Odd that time the expectations were from negative 2% decline earnings now the negative -- point 2% is an improvement at this time.
It's less bad is what you're saying.
So S&P 503 quarter down one point 2% this is -- the worst we've seen since third quarter of 2009 right when it was down one point almost one point 7%.
Let's talk about some of the sectors -- that are really look and miserable.
The materials sector you're expecting a 20% drop in earnings out of the materials sector -- Well you know again -- materials and energy are Arnold laggards I'm on this among the ten.
S&P 500 industry sectors and -- -- as an indication of the week carries state.
Of the global.
Economy and indeed and reflecting on some -- of traps in China and other sectors.
Conversely and we've seen gains expected.
Financials and consumer discretionary.
In fact looking at improvements he can consumer loan losses for.
-- saw improvements in our mortgage refinancing helping the financials.
And the fact that if if -- consumers have.
Greater discretionary come in from the ability to refinance -- improve household wealth which -- -- help the consumer discretionary sector.
Right and actually so financial -- you looking at about a nine point 6% increase which is amazing.
But you're also -- at -- you know even fourth quarter for the financials up over 20% -- years seeing a rebound in the financials aren't you.
If you -- in fact is -- not only for talking about the he improvement -- albeit modest into consumer percent helping the financials but also the industry where this week we're expecting -- ten initial public offerings.
He -- which would help the capital markets sector and -- coming on on the heels of the a very strong third quarter in terms of a Leveraged Buyouts you know over 45 billion dollars.
You know private equity activity to do our best quarter and nearly five years that should -- the fees and revenues -- industry.
But people and hold on to those financials of the banks you made a lot of people very happy right now -- thank you very much interest.
Richard Peterson.
