US Earnings Reflect Resilience of Equities Amid Economic Turbulence

October 24 00:00 2011

New York, October 24 ( – In the midst of turbulence in the financial markets, Q3 has sprung up remarkably upbeat results earnings of US companies. Of course, the beginning of the quarter did see some hiccups especially from Apple, Goldman Sachs and Alcoa but the results of companies in the S&P 500 indicated eighth consecutive quarter of double-digit profit growth.

The euro zone debt crisis has been the crux of the problem, but S&P 500 has bounced back in spite of continued disagreement between euro zone leaders on how to resolve the crisis. It traded at its highest level since early August on Friday and it has been up more than 9 percent this month.

Anthony Conroy, head of trading at BNY ConvergEx said, “Given the uncertainty over Europe, it is not prudent to jump into the market with both feet, but if you have a three- to five-year time horizon, there are great bargains out there.” This sentiment stemmed from the fact that the U.S. and the European markets to an extent, have been trading at cheap levels versus the outlook for company profiles due to the recent turmoil. As such, long-term investors can look for bargains if they believe what companies and analysts are saying.

According to S&P Capital IQ, a blended average of actual and forecast earnings for the S&P 500 to rise 14.6 per cent for the quarter from a year ago is expected by analysts.