In the latest overview of the S&P 500 companies, Oppenheimer Asset Management revealed that the annual growth rates for both earnings and sales have held largely steady as the reporting season draws to a close. With nearly all companies in the benchmark equity index having reported their results, earnings showcased a remarkable increase of 13.5% compared to the same period last year.
Revenue also showed solid growth at 5.3%. In a previous update from the previous week, earnings were noted to have increased by 13.4% while revenues rose 5.4%, based on the financials of 97% of the firms. Prior to this reporting period, analysts surveyed by Bloomberg had anticipated a quarter-on-quarter earnings growth of approximately 7.3% year-over-year.
John Stoltzfus, Chief Investment Strategist at Oppenheimer Asset Management, emphasized this projection. A closer look at the sectors reveals that consumer discretionary and communication services spearheaded the earnings growth, each sector achieving significant gains of about 26%. However, the energy and industrial sectors faced setbacks with respective declines of roughly 26% and 6.2%.
This paints a mixed picture across various industries. In terms of top-line trends, technology companies posted a solid 12% rise, in stark contrast to declines observed within energy, industrials, and materials sectors. As the earnings season approaches its conclusion, only five companies remain to report their financial results.
Market attention is shifting towards consumer and wholesale inflation data that is anticipated later in the week. The backdrop of uncertainty concerning tariffs continues to loom large over the market, according to Oppenheimer. In recent developments, President Donald Trump reportedly issued a new warning regarding potential tariffs on Canadian dairy and lumber products.
This threat emerged just a day after he announced temporary exemptions for certain goods entering the US from Mexico and Canada. Adding to this tension, the White House recently increased its tariffs on imports from China, which in turn announced similar retaliatory measures directed at the United States. Stoltzfus noted, 'Economists, whether they hail from the Federal Reserve or the private sector, are voicing their concerns about how tariffs could potentially impact both the US economy and its trading partners.
This uncertainty is manifesting in heightened nervousness within the markets, particularly in the US.'.