Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

The World Bank’s downgrade of East Asian -- particularly Chinese -- growth outlook will likely have a bigger play today given the absence of any significant economic release on the home front. But it’s hardly surprising given what corporate management teams have been talking about and will likely become a chorus in the third quarter earnings season that gets underway with Alcoa’s (AA - Analyst Report) report after the close on Tuesday.

The earnings report from Yum! Brands (YUM - Analyst Report) around the same time as Alcoa’s release will likely shed more light on the East Asian growth question given the fast-food chain’s substantial Chinese exposure.

Stocks have pushed to new multi-year highs in recent days on the back of monetary stimulus from the Fed and other central banks. But can those gains be sustained should the corporate earnings picture turn out to be weaker than what the market is expecting at present?

The question is not so much about the earnings results for the third quarter, but the outlook for the fourth quarter and beyond. Unlike the third quarter when earnings are expected to decline for the first time in more than 10 quarters, current outlook for the fourth quarter is of a strong earnings rebound.

Consensus expectations for full-year 2013 also remain quite high, with earnings growth in the low double digits. Given what we have heard recently from companies like FedEx (FDX), Nike (NKE - Analyst Report) and others, those growth expectations appear to be on the high side and vulnerable to downward adjustments.

The market has been taking negative revisions to earnings estimates in the stride with the help of easy monetary policy. But can the trend continue once negative revisions accelerate in the coming days? Hard to tell a this stage, but we will know soon enough as the reporting season gets into high gear in the coming days.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
KNIGHTSBRIDG VLCCF 14.32 +14.19%
E*TRADE FINA ETFC 22.55 +4.88%
QUESTCOR PHA QCOR 83.22 +3.93%
BNC BANCORP BNCN 17.81 +2.77%
LAKE SHORE G LSG 0.79 +2.46%