The Strategist

Experts: Q2 profit of S&P 500 companies rise by the maximum in 2 years

07/09/2024 - 07:23

Analysts surveyed by FactSet believe that US corporations whose shares are used to calculate the S&P 500 stock index saw their profits rise by about 9% in the second quarter, marking the biggest growth since the start of 2022.

public domain pictures
public domain pictures
The S&P 500 has increased by almost 16% since the beginning of 2024 thanks to increases in the stock prices of a select group of major technology companies, such as Nvidia Corp., Apple Inc., Microsoft Corp., and Inc.

This has caused market valuations to reach their highest position since late 2021, giving possibility for disappointment if the current reporting season falls short of expectations. The ratio of share prices to predicted earnings has increased from 19 times to more than 21 times from January to today.

"We need earnings to keep up with that value," stated Liz Ann Sonders, chief investment strategist at Charles Schwab. "It won't be an incredibly profitable quarter that doesn't meet projections, but it's obvious that the bar has been set very high."


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