News & Insights

The following has been compiled from information and comments provided by the investment professionals of Frost Investment Advisors:

Earnings Season Unfolding…

Investors are looking for an early read on market trends from the early releases of earnings data for the second quarter.  While still early in the quarter, estimates today are painting a dreary picture, with a very slow recovery into positive growth territory but probably not until next year.  At this writing, initial estimates of earnings for the quarter are expected to be around minus 44 percent over last year’s second quarter, ticking up to an estimated plus 12.4 percent for the first quarter of 2021.  As estimates become “real,” investors will react accordingly.  Last week set the stage for a relatively positive investor outlook as investors bid up three of the four major indexes.  The only laggard, for a change, was the more tech-centric NASDAQ.  Noticeable was the rotation away from tech (growth stocks) and into more value-centric companies, with leaders at Friday’s close including the industrials, materials, utilities, energy and financial sectors. Is this perhaps a signal that investors are beginning to sense the potential of a “real” economic and profit recovery by year’s end?