Earnings Watch: Market focus moves to China, trade war Earnings Watch: Market focus moves to China, trade war Earnings Watch: Market focus moves to China, trade war

Earnings Watch: Market focus moves to China, trade war

Picture of Peter Garnry
Peter Garnry

Head of Saxo Strats

Next week, 283 companies out of the around 2,000 firms we track during earnings season are reporting their latest results. The US earnings season is already 80% done, so there will be no more fuel coming from source. Revenue is up 10% year-on-year and EBITDA is up 10.4% y/y, showing robust performance and no margin pressure.

US stocks have consequently outperformed European, Japanese, and Chinese equities over the summer months, rising close to their all-time high set on January 26. 

Watch China and keep Italy on your radar

With the earnings season almost over, investors will concentrate on the trade war that could escalate over the coming weeks and then the recent depressed sentiment out of China that is seeing massive weakness in CNY and its equity market. Given China’s global importance, it’s staggering to watch the complacency in financial markets.

(Find more of our thoughts on China in our recent Equity Monthly update.)

As of the last couple of days, government spreads have widened on BTPs (Italian government bonds) in a sign that investors are nervous over comments coming out of Rome regarding to its debt and fiscal situation. The new government says it will put Italian interests first, which is an indirect way of saying that Italy will challenge the European Union, most likely on fiscal and debt constraints.

The message from the bond market is clear: go down this route and we will lose confidence in Italy.

The most interesting earnings next week

Walt Disney reports FY18 Q3 earnings on Tuesday (after-market). Analysts expect EPS to grow by 27% y/y helped by the US tax reform; revenue is expected to grow 8% y/y driven by a probable strong quarter for the films segment. 

Novo Nordisk reports Q2 earnings on Wednesday (before-market) with analysts expecting negative revenue growth as the pricing environment remains challenging on insulin in North America.

Adidas reports Q2 on Thursday (before-market). Investors are prepared to see slower growth than the 2015-2017 period so the focus will be on outlook and particularly margin improvements. Adidas has a 12-month trailing EBITDA margin of 12.6% compared to Nike’s 14.3%, so margin expansion will continue to be the dominating theme and potential driver of performance for Adidas.

Below is a table of the 30 largest companies reporting earnings next week, including earnings and revenue estimates.

Sources: Bloomberg, Saxo Bank


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.