Morgan Stanley expects strong results from U.S. companies, particularly tech, to offset fears related to the U.S.-Iran war. Analysts at the firm point out that earnings estimates for S&P 500 (SPX) companies have been revised higher on multiple timeframes over the past month. Estimates for the second quarter have climbed 2%, while full-year projections are up 3%.
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Forget margin or options. Here's how the pros trade QQQIn addition, S&P 500 companies who have already reported first-quarter results have beaten estimates by a median of 6%, marking the highest level in four years.
Earnings Strength Expands Beyond Tech
Morgan Stanley CIO Mike Wilson points out that while hyperscalers and semiconductor stocks have dominated earnings, the strength isn’t limited to these two groups. The financial, industrial, and consumer cyclical sectors have also received upward revisions from analysts.
In addition, Wilson expects the impact of the war to be uneven rather than broad, with companies facing cost pressures on an individual basis instead of entire sectors being hit. Furthermore, he expects energy stocks to support the benchmark index’s growth trajectory.