Earnings Watch: Q1 earnings season kicks off next week Earnings Watch: Q1 earnings season kicks off next week Earnings Watch: Q1 earnings season kicks off next week

Earnings Watch: Q1 earnings season kicks off next week

Equities 7 minutes to read
Peter Garnry

Head of Equity Strategy

Summary:  US financials will kick off the Q1 earnings season next week with the key US earnings to watch being those from JPMorgan Chase, Wells Fargo, and Citigroup. Despite rising interest rates, US financials have underperformed the S&P 500 since mid-February and the question is whether US banks can improve sentiment through an improved outlook despite many challenges on input costs. Our earnings focus outside the US is on Tesco, Fast Retailing and Ericsson. In today's equity update we are also warming up to the debate on how technology companies will do through inflation in terms of earnings growth and equity valuations.

US financials in focus

The Q1 earnings season starts next week with US financials reporting first. JPMorgan Chase reports Q1 earnings on Wednesday and will set the tone for the earnings season as the US bank is the biggest bank in the developed world. Wells Fargo and Citigroup are both reporting on Thursday are also key to watch due to their consumer and commercial banking exposure, while earnings from Morgan Stanley and Goldman Sachs are typically not moving markets or sentiment.

US financials have had a tough time lately despite rising interest rates (the flattening of the US yield curve has not helped) underperforming the S&P 500 by 8.1% since 11 February (see chart below on relative return between US financials and S&P 500). On a relative basis, US financials are back to the lows from late December. With the latest FOMC Minutes and Brainard’s comments, US financials could soon begin a longer term rally into the summer months. Keep in mind that this is a tactical theme and not a long-term secular theme as financials are facing many structural headwinds.

Source: Bloomberg

Outside of US financials, Tesco on Wednesday is an interesting earnings release to watch because of the galloping food prices also seen today with UN World Food Price Index hitting the highest level ever rising 33% y/y. Fast Retailing, the parent company behind Uniqlo, is reporting on Thursday and will give good insights into consumer demand in Japan. Ericsson also reports on Thursday and is expected to see revenue growth accelerate to 7% y/y as investments in telecommunication equipment are going up.

The most important earnings releases next week are:

  • Monday: Yunnan Energy New Material, Zijin Mining Group
  • Wednesday: Tesco, JPMorgan Chase & Co, BlackRock, Fastenal
  • Thursday: China Northern Rare Earth Group, Fast Retailing, Ericsson, UnitedHealth, Wells Fargo, Morgan Stanley, Goldman Sachs, Citigroup, US Bancorp, PNC Financial Services, Coinbase, State Street
  • Friday: Hangzhou Hikvision Digital

Technology earnings during inflation is a key outstanding question

Investors are well aware of inflation and to what extent it can negatively impact equity valuations and equity returns, especially in real terms, and many are drawing conclusions from the 1970s. The big difference between the 1970s and today is that back then the profit engines of S&P 500 were companies that generated those profits with significant input costs from commodities. Today, the profit engines of S&P 500 are technology companies which generate profits with very little input from commodities. In theory, technology companies should be able to be able to grow earnings, so the main question is the impact on equity valuations of technology companies from higher inflation. This is a topic will discuss more as the Q1 earnings season progresses as the market’s reactions to technology earnings will give us clues about these dynamics.


Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, 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. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such 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.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

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

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.