Corporates have so far outperformed expectations for the third quarter, fueling investor optimism and causing stock markets in the United States to rise across the board. So far, and as of this writing, 41 S&P 500 companies have reported earnings, with 80% exceeding expectations. Taking into account companies that have already announced earnings and projected earnings for the remaining firms, the S&P 500 is on track to achieve its highest quarterly growth rate of 30% since 2010.
Tesla (NASDAQ:TSLA), Netflix (NASDAQ:NFLX), and IBM (NYSE:IBM) are set to release their financials this week.
Investors amid the earnings season should focus on company commentary about economic recovery, inflation, and supply chain bottlenecks. The main drivers of economic growth in coming months are likely to be delayed effects of the central bank’s stimulus, increased consumer spending because of pent up savings, and replenishment of inventories which were impacted by the coronavirus pandemic.
In the coming months, supply chain issues are expected to ease down and the gap between demand and supply to reduce in 2022. Consumer income is also projected to rise due to a jump in wages.