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.