HSBC provided visions about the next fourth quarter profit season, noting that the low agreed expectations for the share profits growth in the fourth quarter (EPS) has placed a low end, which may overcome many companies’ expectations.
This scenario may lead to a temporary rise in stock prices for those that meet or overcome expectations.
However, HSBC Bank confirmed that the constant momentum of stock prices will depend on companies’ expectations for 2025.
The report indicated that the forecast for the arrow’s profit growth for the fourth quarter is now 3.8%, which is a significant decrease from the 9% expectations after the reports season for the third quarter. Most sectors have witnessed a decrease in the arrow profit estimates, while periodic factors remain a growth engine.
On the other hand, revenue growth estimates for the fourth quarter witnessed a slight increase to +0.9% from -0.3% two months ago.
Looking at the future, HSBC referred to an improvement in the earnings of the share of the year 2025 for the United Kingdom, and attributed this positive shift to the power of the US dollar.
The research company expects that the company’s directives will reflect this optimism, although caution due to the doubts surrounding the policies of American definitions and the weak consumer confidence, especially in the United Kingdom. However, the initial reports issued by the luxury commodity sector indicate a promising start.
Despite the positive references of 2025, the estimation of the agreed arrow profit growth for Europe for the year 2024 has been adjusted to only 0.2 %, which is a blatant contradiction with the expected 5.6 % at the beginning of the year.
The consumer and energy sectors are referred to as the most important shareholders in this declining direction.
HSBC concluded that the reports season for the fourth quarter may confirm whether European and UK stock markets have already exceeded the peak of uncertainty.
