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Quarterly Earnings Cycle Kicks Off Friday

EQUITIES
  • This week marks the beginning of the quarterly US earnings cycle, with big banks and financials first up from Friday. Full MNI Schedule here: https://roar-assets-auto.rbl.ms/files/50444/MNIUSE...
  • Earnings season begins in earnest in the w/c 24th Jan, withboth the number of reports picking up as well as the cumulative market cap of the S&P 500. Financials and large cap US banks are the initial focus, with markets watching for headlines on provisions, costs and capital plans.
  • Morgan Stanley write that the market's attention is to shift from inflation & the Fed to earnings growth and recession concerns. They write that the earnings outlook has worsened, with corporate confidence at historically depressed levels. Meanwhile biz surveys have rolled over while supply chains/backlogs have eased.
  • They retain a 2023 price target of 3,900 for the S&P500 (bull case: 4,200, bear case: 3,500). They recommend overweight healthcare, staples, utilites. Underweight discretionary & tech hardware.

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