Goldman Sachs Has a Warning For This Quarter's Corporate Earnings
Fewer upside surprises in the cards.
This article is for subscribers only.
When Goldman Sachs Group Inc. Chief U.S. Equity Strategist David Kostin puts on his macro goggles, he sees a disappointing third-quarter earnings season ahead.
"Variables that determine earnings surprises – changes in U.S. economic growth, interest rates, oil price, the dollar, and EPS [earnings per share] revisions – suggest a below-average share of firms will report positive earnings per share surprises (43 percent vs. 46 percent)," he writes in a note to clients. " We see a weak third-quarter reporting season coupled with negative fourth-quarter EPS revisions pushing stocks 2 percent lower to our year-end target of 2,100."