Well, here’s something you probably wouldn’t have expected given everything going on in the world right now: stock market analysts are actually raising their earnings forecasts.
This week’s chart tracks how 12-month earnings expectations have changed across four major global stock markets since December. Every single one is up. The U.S. S&P 500 has seen estimates revised higher by 9%. Europe is up 5%. Japan, 7%. And the real head-turner? Emerging Markets, up a whopping 24%, the biggest earnings upgrade of the bunch.
Ok, but what’s driving this? Well, for the U.S. and Emerging Markets, a lot of it comes down to the continued surge in AI-related investment and tech spending. Europe and Japan are also getting their own lift from fiscal spending on infrastructure and defense. The drivers are different, but the bottom line is the same: companies are expected to earn more.
So yeah, it’s easy to get swept up in the headlines right now. Geopolitical tension, economic uncertainty, you name it. But step back and look at what analysts are actually penciling in, and the earnings outlook globally is moving in the right direction.
This is intended for informational purposes only and should not be used as the primary basis for an investment decision. Consult an advisor for your personal situation.
Indices mentioned are unmanaged, do not incur fees, and cannot be invested into directly.
Past performance does not guarantee future results.
The S&P 500 Index, or Standard & Poor’s 500 Index, is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S.
The STOXX Europe 600 Index is a market-capitalization-weighted index of 600 publicly traded companies across 17 European countries.
The TOPIX Index, or Tokyo Stock Price Index, is a market-capitalization-weighted index of all domestic common stocks listed on the Tokyo Stock Exchange Prime Market.
The MSCI Emerging Markets Index is a free float-adjusted market-capitalization-weighted index designed to measure equity market performance across emerging market countries.