Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Recession fears ease as Q3 earnings season winds down

Now that most of the S&P 500 have reported earnings, it seems recession worries have abated to an extent

How did US companies perform in this earnings season?

As of 18 November, with 94% of the S&P 500 having reported earnings, 69% of companies in the index have reported a positive surprise in earnings per share (EPS), with 71% reporting a positive surprise in revenue. The earnings surprise level is below both its five- and ten-year averages, indicating continued weakness in US corporate performance relative to recent history.

The overall earnings growth rate for Q3 is currently 2.2%. This is the lowest growth rate for companies in the S&P 500 since the third quarter of 2020, when earnings fell 5.7%. Eight sectors in the index reported a decline in earnings over the year, including the financials and materials sector. By contrast, earnings growth was seen in the energy, real estate and industrial sectors

Are US stocks now cheap?

The decline in US indices this year and the fall in earnings has meant that the PE ratios for the index are lower. As of mid-November, the PE ratio for the S&P 50 is 17.2. This is below the five-year average of 18.5 but it remains above the ten year average (17.1).

This leaves the index rather finely-balanced, although given the gloomier outlook for the year ahead, which is expected to see further earnings weakness, these valuation levels may fall further. Stocks are, in the final analysis, driven by earnings growth, and further weakness in 2023 will mean stocks are at risk of further, potentially significant, falls.

Are recession fears increasing?

While it might seem like US companies continue to worry about a recession, it appears that, for now, recession fears are easing.

Q3’s GDP figure marked the first positive growth report in three quarters, and as a result, fewer companies in the S&P 500 reported recession fears in their earnings conference calls.

179 companies used the word ‘recession’ in Q3 earnings calls, a level well above both the five- and ten-year average, but down from Q2’s 242. However, earnings forecasts for the next quarter have fallen to -2.1%, the first annual decline since Q3 2020, when earnings fell 5.7%.

S&P 500 – technical analysis

Since mid-October, when the index briefly traded below 3500, its lowest level in two years, It has rebounded some 500 points, or almost 15% peak-to-trough.

The post-CPI bounce resulted in the index pushing above trendline resistance from the August high, and after some consolidation, it has resumed its move, rallying above 4000 and targeting the 200-day SMA (currently 4050).

If it succeeds in reaching the 200-day SMA, then it will be the first time this indicator has been reached since early August. However, it will still need to move above the early September highs at 4156. This would continue to confirm the strength of the bullish rebound.

A reversal below 3900 would be needed to revive a short-term bearish view and suggest that a test of trendline support from mid-October might result.

Seize your opportunity

Deal on the world’s stock indices today.

  • Trade on rising or falling markets
  • Get one-point spreads on the FTSE 100
  • Unrivalled 24-hour pricing

See opportunity on an index?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on an index?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from one point on the FTSE 100
  • Trade more 24-hour indices than any other provider
  • Analyse and deal seamlessly on smart, fast charts

See opportunity on an index?

Don’t miss your chance. Log in to take your position.

Related articles

Live prices on most popular markets

  • Equities
  • Indices
  • Forex
  • Commodities
website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.

" edit-mode="false" style="--live-prices-table-rows:5" >


Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.