Earnings Season Begins, Falling Inflation, Labor Force Recovery
April 13, 2023 | FIRESIDE CHARTS
Equity markets are rallying into earnings season, despite unusually high uncertainty surrounding earnings estimates. Recent banking issues have put a spotlight on commercial real estate. Inflation data is coming in lower than expected, with relief in key categories for consumers. The prime age labor force participation rate has returned to pre-pandemic levels. Consumers are still flush with savings.
1. The highly anticipated bank earnings begin this week and roughly 60% of the S&P 500 by market cap will have reported by the end of the month:
2. Equity markets seemingly have high expectations:
Source: @luwangnyc, @isabelletanlee, @markets Read full article
3. But analyst estimates are displaying an unusual degree of uncertainty:
Source: Deutsche Bank Research
4. Higher interest rates, and lower occupancy rates in office buildings, have cast a shadow over commercial real estate and banks hold much of the sector’s debt:
Source: Goldman Sachs
5. Lagging shelter inflation continues to drive headline numbers but it’s notable that inflation outside of the major categories is falling:
Source: Nomura Securities
6. A major slowdown in food inflation is a positive development for consumers:
Source: Daily Shot 4/13/2023
7. Workers outside of the “prime” 25 to 54 age range are responsible for the remaining gap in labor force participation:
Source: Daily Shot 4/10/2023
8. A return to pre-pandemic immigration rates would help to solve the labor supply issues:
Source: Goldman Sachs
9. Consumers are reluctant to spend their excess savings:
Source: RSM US Read full article
Disclosure: The charts and infographics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are they a recommendation to take any action. Individual securities mentioned may be held in client accounts. Past performance is no guarantee of future results.