« US economic weakness still contained | Main | Are Japanese stocks oversold? »

Corporate earnings holding up

Posted on Wednesday, September 26, 2007 at 09:10AM by Registered CommenterSimon Ward | CommentsPost a Comment

Changes in equity analysts’ estimates are a good guide to corporate earnings momentum. September figures are reasonably encouraging – upgrades and downgrades across developed markets broadly balanced out.

The details show expected large downgrades among financial stocks, reflecting the “credit crunch”. However, there has been offsetting strength in other areas, including IT, telecommunications, materials and industrials.

As the chart shows, G7 industrial activity correlates with the world revisions ratio – upgrades minus downgrades divided by the total number of estimates. The ratio fell back in September but remains at a level consistent with economic expansion.

g7-output-world-revisions.jpg

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>