Live Markets: Rest of S&P 500 seen outpacing Mag 7 on Q3 earnings growth - Jefferies

Microsoft

Tue 13:16

US equity index futures modestly green; Nasdaq 100 up ~0.4%
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Euro STOXX 600 index up ~0.1%
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US 10-year Treasury yield flat at ~4.99%
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REST OF S&P 500 SEEN OUTPACING MAG 7 ON Q3 EARNINGS GROWTH - JEFFERIES
The rest of the S&P 500 .SPX is expected to outpace the "Magnificent Seven" on earnings growth in the third quarter, according to Jefferies, a sign that profit momentum is broadening beyond the handful of mega-cap technology stocks that have driven much of the US market's gains in recent years.
Adjusted earnings for the rest of the S&P 500 companies are expected to rise 32%, against 21.4% for the Mag 7, Jefferies strategist Jane Gibbons said in a note.
The Mag 7 still leads on revenue, with sales seen growing about 23% versus 11% for the rest of the index, Gibbons added.
Robust earnings growth among US companies has supported the stock market's advance this year despite headwinds including rising Treasury yields and energy costs driven by tensions in the Middle East.
With more than 120 companies having posted results so far, third-quarter earnings are on pace to have climbed more than 30% from a year ago, according to LSEG I/B/E/S data.
AI productivity, spending, and inflation remain key themes on earnings calls so far, Gibbons said.
With several Big Tech heavyweights, including Alphabet GOOGL.O, Microsoft MSFT.O and Amazon AMZN.O, set to report this week, focus will be on the guidance the companies give on capital spending plans and whether they are seeing returns on the massive outlays.
     
(Joel Jose)
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EARLIER ON LIVE MARKETS:
TREASURIES REGAIN HAVEN ROLE, SIGNALING A SHIFT IN MARKET FEARS CLICK HERE
DEMOCRATIC SWEEP AND TECH SELLOFF CLICK HERE
HEALEY'S WAR CHEST CLICK HERE
BOFA OVERWEIGHT 'ANTI-AI' FOOD AND BEVERAGE STOCKS CLICK HERE
BEARISH EQUITY POSITIONING INCREASING ACROSS REGIONS CLICK HERE
SOFT START, FTSE DRAGGED LOWER BY HSBC CLICK HERE 
EUROPE BEFORE THE BELL: POSITIVE TONE FADES CLICK HERE
ALL EYES ON AI CLICK HERE