Saxo Bank has released a new video examining the leaders and laggards of the Q3 earnings season.
With more than 20 percent of the benchmark S&P 500 companies having reported their results, the new video with Peter Garnry, Equity Strategist at Saxo Bank, not only looks at the leaders and laggards of the season but also what common threads, if any, there are across sectors.
The new equity video particularly focuses on the far reaching consequences of the Eurozone crisis on banking and financial entities plus the apparent invincibility (at least for now) of companies in the energy and technology sectors to the slowing economic growth of several key economies around the globe.
Peter Garny said: "We have said several times that we're in favour of technology and energy stocks and this earnings season so far has proven that those two sectors are the fastest growing in terms of sales and profits.
"Going forward, we're still positive on energy and technology stocks and relying on those two sectors due to their flexibility in terms of their operating model; they generate a lot of free cash flow and they have a very flexible balance sheet because they have a very low debt-to-equity ratio and the prices are very favourable."
In the video he also looks at the biggest earnings surprise so far from Caterpillar, which is benefitting largely from a mining boom driven primarily by China's demand for industrial metals and other mined materials used in manufacturing.
Peter likens the overall lack of expression and visibility concerning 2012 earnings outlooks as akin to radio silence with very few companies daring to speak up, and some actually even avoiding guidance on the fourth quarter despite relatively reliable revenues.
"Most of the companies are unable to give investors any guidance on where they see even the fourth quarter going. A lot of the companies are reporting very close to zero visibility on how their sales are coming in and we saw that Pepsi Co. couldn't even say anything about 2012; they deferred and said they would give guidance on 2012 in mid-December. That's a consumer stable company - they have pretty stable sales so that says a lot about the environment we live in now."
Peter concluded by saying the industrial sector will be one to watch over the next quarter, as well as re-affirming the strength of the energy and technology sectors.
About Saxo Bank:
Saxo Bank is a leading online trading and investment specialist, enabling clients to trade forex, CFDs, Stocks, Futures, Options and other derivatives. The three specialised and fully integrated trading platforms for forex trading; the browser-based SaxoWebTrader, the downloadable SaxoTrader and the SaxoMobileTrader application are available in over 20 languages. Saxo Asset Management accommodates high-net worth private clients and institutional investors. In 2011 Saxo Bank continued the diversification of its business and launched Saxo Privatbank.
The Saxo Bank Group is headquartered in Copenhagen with offices throughout Europe, Asia, Middle East and Australia.
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