Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Earnings Peak May Have Been Reached, Citi Warns

Stock MarketsOct 26, 2021 05:36AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. Earnings Peak May Have Been Reached, Citi Warns

(Bloomberg) -- This earnings season may be as good as it gets, according to Citigroup Inc (NYSE:C).

Strategists led by Mert Genc say global earnings per share will rise only 5% in 2022, less than the current consensus for 7% growth and far below the 50% increase anticipated for 2021. Their projection comes after Citi economists downgraded their global growth forecast for next year to 4.2% from 4.4%.

Company analysts may soon shift to “net downgrade mode” for the first time since July 2020, which while “not necessarily fatal for markets” provides reason to be nervous, the strategists wrote in a note. Industries and countries that are most exposed to Chinese growth are the most vulnerable, they said, citing the mining sector, Australia and Germany.

Citi’s caution adds to a series of warnings by strategists that the seemingly unstoppable rally that has pushed U.S. and European stocks to successive records may be running out of steam. Bond yields are rising as central banks hit the brakes on stimulus measures, while the impact of a slowdown in China’s economy is becoming more pronounced.

UBS Global Wealth Management’s Chief Investment Officer Mark Haefele takes a more positive view. He sees a 9% global growth in earnings per share next year and further upside for equities against the backdrop of a continuing robust expansion of the world’s economies.

“We see the current issues as transitory rather than the makings of a new, stagflationary economic regime,” Haefele wrote in a note Tuesday.

Despite their differing outlooks, both Citi and Haefele recommend that investors buy financials -- either because they benefit from higher bond yields or as beneficiaries of economic expansion. And for both, healthcare is their preferred defensive sector, in case things turn sour.

©2021 Bloomberg L.P.


Earnings Peak May Have Been Reached, Citi Warns

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email