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Monday, 10 October 2022

US stock markets brace for another rough earnings season

S&P 500 companies are expected to see their weakest earnings growth in three years in 3Q 2022, with Wall Street analysts cutting their earnings forecasts by some USD 34 bn, the Financial Times reports. Analysts expect S&P 500 firms to report earnings-per-share growth of 2.6% y-o-y in 3Q 2022 — a downward revision from the 9.8% that had been penciled in for the quarter at the beginning of July, according to FactSet data.

How low can the S&P 500 go? The index has already fallen by more than a fifth this year, but many analysts worry that current earnings estimates are still too bullish thanks to concerns over the US Federal Reserve’s monetary tightening and indications the US economy is heading into a recession, the salmon-colored paper says. Estimates for 2023 are stronger, however, with consensus suggesting 6.5% growth in 1Q 2023 and 5.5% in 2Q 2023, underpinned by resilient retail spending and easing energy prices.

ALSO- Another blockbuster Saudi IPO: Saudi utility firm Marafiq covered the books for its USD 897 mn IPO — the country’s largest since March — within hours of opening yesterday. Bookbuilding will last until 14 October and the retail offering runs from 26-29 October. (Bloomberg)

Down

EGX30

9,941

-0.7% (YTD: -16.8%)

Up

USD (CBE)

Buy 19.60

Sell 19.71

None

USD at CIB

Buy 19.63

Sell 19.69

None

Interest rates CBE

11.25% deposit

12.25% lending

Down

Tadawul

11,566

-1.6% (YTD: +2.5%)

Up

ADX

9,905

+1.4% (YTD: +16.7%)

Up

DFM

3,373

+0.7% (YTD: +5.5%)

Down

S&P 500

3,640

-2.8% (YTD: -23.6%)

Down

FTSE 100

6,991

-0.1% (YTD: -5.3%)

Down

Euro Stoxx 50

3,375

-1.7% (YTD: -21.5%)

Down

Brent crude

USD 97.77

-0.2%

Down

Natural gas (Nymex)

USD 6.66

-1.4%

Down

Gold

USD 1,705.30

-0.2%

Down

BTC

USD 19,416

-0.0% (YTD: -58.0%)

THE CLOSING BELL-

The EGX30 fell 0.7% at yesterday’s close on turnover of EGP 560.6 mn (42.1% below the 90-day average). Regional investors were net buyers. The index is down 16.8% YTD.

In the green: Alexandria Containers and Cargo Handling (+3.5%), Rameda Pharma (+3.0%) and Qalaa Holding (+2.0%).

In the red: Madinet Nasr for Housing and Development (-2.7%), Fawry (-2.5%) and Heliopolis Housing and Development (-2.4%).

Asian markets are down across the board in early trading this morning and futures are showing a sea of red on both sides of the Atlantic when western markets open up later in the day. Stocks are struggling amid increasing worry that the Fed’s aggressive tightening cycle could trigger a global slowdown, Bloomberg reports.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

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