S&P 500 Faces Moment of Truth as Q2 Earnings Season Kicks Off Next Week
Get ready for more volatility, folks, the next major test for the stock market rally is upon us.
Wall Street's second-quarter earnings season unofficially begins on Friday, July 14, when notable names like JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), and UnitedHealth (NYSE:UNH) all report their latest financial results.
The following week sees high-profile companies like Tesla (NASDAQ:TSLA), Netflix (NASDAQ:NFLX), IBM (NYSE:IBM), Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), Charles Schwab (NYSE:SCHW), American Express (NYSE:AXP), Johnson & Johnson (NYSE:JNJ), and United Airlines (NASDAQ:UAL) report earnings.
The earnings season gathers momentum in the final week of July when the mega-cap tech companies are scheduled to deliver their Q2 updates. Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) are both due on Tuesday, July 25, followed by Meta Platforms (NASDAQ:META) on Wednesday, July 26, and Amazon (NASDAQ:AMZN) on Thursday, July 27. Apple (NASDAQ:AAPL) will be the final ‘FAAMG’ stock to report results on Thursday, Aug. 3.
Investors are bracing for what may be the worst reporting season in three years amid the negative impact of several macroeconomic headwinds.
After earnings per share for the S&P 500 fell -2.0% in Q1 2023, earnings are expected to drop -6.8% in Q2 compared to the same period last year, as per data from FactSet.
If -6.8% is confirmed, that would mark the biggest year-over-year earnings drop reported by the index since the second quarter of 2020 when the economy was reeling from the negative impact of the COVID-19 crisis. It will also mark the third consecutive quarter in which S&P 500 earnings have declined year-over-year.
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