Third-quarter earnings season ramps up in earnest this week with a packed schedule of major financial companies poised to report results. Key economic data will include the U.S. consumer price index for September, in the latest print on the state of inflation in the U.S. economy.
Investors have been anxiously awaiting the start of the latest earnings season and bracing for a deceleration in corporate profit growth after a strong second quarter.
S&P 500 earnings are expected to grow by 27.6% in aggregate for the third quarter, slowing sharply from the second quarter’s nearly 90% growth rate, according to data from FactSet. Still, last quarter’s results had been aided by easy comparisons to the pandemic-depressed profit levels of mid-2020. And at nearly 30%, the expected earnings growth rate for the third quarter would still be the third-fastest pace for the index since 2010.
Traders are especially looking to see that supply-side challenges and rising input and labor costs weighed heavily on corporate profits for the latest quarter. Nearly two dozen S&P 500 companies — including major names like FedEx (FDX) and Nike (NKE) — have already reported third-quarter results, giving hints about the magnitude of the margin pressure being exerted by supply-side challenges.