Quarterly earnings season is here. Reports from big banks can give us a window into both the health of consumers and that of the broader economy. But banking isn’t the only sector offering hints in its quarterly results write-ups and calls.
This week we’ll hear from airlines, entertainment companies and leaders in the AI chipmaking space.
Earnings reports pull back the curtain on how individual companies are faring in addition to offering potential answers to bigger questions, said Karen Petrou with Federal Financial Analytics.
“How much consumers are spending, whether demand for a particular product is going up and what that means farther down the supply chain,” Petrou said.
And quarterly results are playing a particular role now.
Analysts are shifting their focus from macroeconomic data on the labor market and inflation to watching companies for the fallout of last month’s rate cut, said Sheraz Mian, director at Zacks Investment Research.
“There have been fears about whether the Fed, perhaps they were late to the party and perhaps the slowdown will get out of their hands,” Mian said. “So, that’s kind of the big picture theme this earnings season.”
For example, we’ll hear from United this week. Sam Stovall with CFRA Research said airline earnings will give us a look at labor costs.
“Could we be seeing these companies face higher and higher expenses in that regard?” Stovall said.
And Stovall said results in the retail and entertainment sectors, like Thursday’s report from Netflix, will include tells about whether consumers are willing to keep up with high prices.
Mian with Zacks will be tuned into Thursday’s earnings call for Taiwan Semiconductor Manufacturing.
“AI has been a big theme in the marketplace, and [TSMC] have been right in the middle of that,” Mian said.
He said TSMC’s outlook will offer a clue as to how much AI is fueling corporate growth this quarter. In a few weeks, results from a slew of tech companies will give us a fuller picture.
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