The current earnings season is shaping up to be a pivotal moment for market sentiment, according to analysts at UBS. Amidst a flurry of earnings releases, UBS remains optimistic about the potential of robust corporate performance to bolster investor faith in the markets.
This week marks a significant period, with approximately 180 companies from the set to disclose their results, including notable members of the Magnificent 7. UBS emphasizes that the outcome of these earnings announcements could play a crucial role in reigniting market confidence.
One standout during this earnings flurry has been Tesla (NASDAQ:), which saw its stock rise in after-hours trading despite an earnings miss. Investors responded positively to Tesla’s plans for an accelerated rollout of new, more affordable vehicle models. This reaction underscores the market’s appetite for forward-looking growth strategies even amid short-term financial results that may fall below expectations.
Overall, the results thus far have aligned with UBS’s optimistic projections. The firm continues to anticipate earnings per share growth in the range of 7% to 9% for the S&P 500 during the quarter, positioning the market for a solid 9% increase in profits throughout 2024.
Looking ahead, UBS “expects April to be an air pocket for markets with the S&P 500 still on track to end the year around 5,200—up from 5,070 at the close on Tuesday.”
UBS also maintains a favorable outlook on small-cap stocks, seeing them as poised for a rebound once interest rates begin to trend lower and earnings growth gains broader momentum across the market.
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