U.S. corporate profits expected to fall in the first quarter
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According to FactSet analysts who cite The Wall Street Journal, companies from the S & P 500 index in the first quarter of this year will show an average decrease in net profit by 6.8% compared to the first quarter of last year. If forecasts come true, this will be the second consecutive decline in quarterly profits of the largest US companies.
In the coming week, the US is expected to start the corporate reporting season for the first quarter, in which analysts note several significant negative factors: the continued rise in inflation, the increase in the Fed’s base interest rates and problems in the financial sector, manifested in the form of bankruptcy American bank SVB and the crisis around the Swiss bank Credit Suisse, which was saved from bankruptcy thanks to intervention the Swiss authorities, who organized its urgent purchase by the country’s leading bank UBS. “From a corporate standpoint, we are already in a recession,” Eric Gordon, an analyst at Brown Advisory, told the WSJ.
Banks JPMorgan Chase, Citigroup and Wells Fargo are among the first in the US this week to report for the first quarter, so analysts are waiting for these reports with particular concern. “We are trying to understand the impact that monetary tightening has on the economy (Fed.— “b”), – says Scott Duba, Chief Investment Officer of Prime Capital Investment Advisors. – This is (bank statements. –“b”) can show us what the financial markets are like right now.”
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