Markets struggled to make significant headway for the third week in a row. All major developed markets finished the week fractionally down, reflecting mixed signals coming from a range of technical and economic indicators.
Positive share price moves during the first quarter of 2023 suggest that this critically important US corporate earnings season will not be as bad as expected (expectations are for a headline -8% contraction). We are now in the proverbial ‘belly’ of the reporting period, with the proportion of companies beating consensus expectations at over 75%, according to FactSet.
Key trends will be closely watched, including any lasting impact of the recent Silicon Valley Bank debacle. Early announcements from the bigger banks (JPM, Citi, Wells Fargo) have been well received, but First Republic sold down sharply (-20%) on weak results, indicating more significant problems for regional banks that have suffered acute deposit withdrawals in recent weeks.
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