Once again IG’s extended hours trading on the major US equities has been fully utilised by clients. This has proven to be a particularly useful tool considering that almost all of the figures released in this reporting season have been done either before or after the US markets have closed. IG has offered extended trading hours for 35 different US equities and is still waiting for three to report.
So how have they performed? Markets headed into this reporting season questioning whether the profit multiples being attributed to the US corporate scene were warranted. Now that the majority of companies have reported we are in a better position to judge this. External factors still account for much of the values being attributed to equities as the US debt purchasing scheme has only just come to an end.
Of those companies on our extended trading list that have reported, we have seen 68.75% beat market expectations, 12.5% came out in line with expectations and 18.75% miss their targets. These figures do not completely legitimise the values that US equities have, but they do go some way towards it. Institutional analysts appear to have tempered their expectations, and this too is partially responsible for the US corporate sector to once again outperform expectations.
Individual company issues aside, companies are expecting the next quarter to be tougher and have also highlighted the extended period of US dollar strength. Although these might not have been figures that have seen champagne bottles popping, they have given little reason to derail the current optimism surrounding US equity markets.