Oct. 24 at 12:37 PM
Global stocks have started the third-quarter earnings season strong, with better-than-expected results helping markets overlook geopolitical uncertainty, according to Barclays.
In a note led by analyst Emmanuel Cau, Barclays stated: "A strong earnings start has helped stocks overcome geopolitical noise. EPS results are stronger in the U.S. than Europe, mainly due to exchange rates. However, EU Banks and Cyclicals are performing well, driving the most positive stock reactions in two years."
With about a quarter of companies reporting, Barclays noted 14% EPS growth in the U.S. and 4% in Europe, both "better than expected."
The bank added that combined EPS growth is now "0% for Europe and 9% for the U.S."
Barclays highlighted that exchange rates remain a key factor, with a strong euro "hurting European earnings compared to U.S. ones."
However, "domestic EU companies, Banks, and Cyclicals have performed well so far," led by Materials and Technology sectors.
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