Stock Market Today: Live Updates

It’s early in the second-quarter earnings season, but so far most U.S. and European companies have beaten analyst expectations, but stocks have lagged behind, according to JPMorgan.

“Of the early reports, 70 S&P 500 results and 90 in Europe, mostly above consensus expectations,” Mislav Matejka, head of global and European equities strategy at JPMorgan, said in a memo to clients early Monday morning. “Even though the sample set is relatively small, stocks react worse than usual to beats.”

Moreover, JPMorgan has been eyeing companies issuing earnings warnings ahead of second-quarter results, and the group’s shares are down more than 10%, except for some energy and chemical stocks, likely due to a poor first half performance in July.

Bottom line, JPMorgan doesn’t expect second-quarter earnings to have much of a boost to the market compared to first quarter, for several reasons. “This time around, the overall stock price response may be more muted, or at least the positive momentum may not be sustained,” Matejka said. “After cautious sentiment and positioning ahead of the first quarter, stock markets have been strong going into the second quarter earnings season, suggesting that expectations on the buy side are even higher despite analyst forecasts being subdued. The question is also whether guidance will be lifted on the back of a quarterly beat as some momentum is lost as the quarter progresses and data flows in China continue to disappoint.”

— Scott Schnipper, Michael Bloom