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Key Takeaways
Earnings are front and center – and rightfully so. Over the last 20 years, more than 90% of the S&P 500’s price return has been explained by earnings. Therefore, an accurate reading on earnings is incredibly important to determining the direction of the market. Since the earnings results we are receiving are for the fourth quarter of last year, the reports are effectively 'old news.' However, the accompanying forward-looking commentary from CEOs is 'hot off the press' and provides us with valuable, real-time insights. At this juncture of the 4Q22 earnings season, ~35% of the S&P 500’s market capitalization has reported results. And currently, the Index is on pace for its first quarterly decline in earnings (-3.8%) since 3Q20. Below we summarize our five takeaways for what we’ve learned thus far and share what we hope to learn before the 4Q22 earnings season comes to a close.
What we have learned | As we enter the busiest week of earnings, there are several themes and patterns emerging that include:
What we hope to learn | With over 65% of earnings yet to report, investors still have much to learn through the 4Q22 earnings season. Next week will be especially prescient, with ~115 S&P 500 companies (representing 33% of market cap) on the docket. With results across a wide swath of sectors and industries set to come, below are some of the key items that we will have our eye on:
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