00:00If you look at earnings forecasts at the moment for the year, they're still well into double digit, 15, 16,
00:0517, 18 percent.
00:06So there's a lot of headroom for the earnings to come down a little bit.
00:10But at the moment what you're seeing is you're seeing actually earnings stay pretty flat because on the one side
00:14you've got the energy and the materials earnings going up and tech earnings.
00:19I mean, I think tech for the U.S. is well into 40 percent earnings growth.
00:23But on the other side, what you're starting to see is things like airlines earnings, expectations coming down.
00:27And again, I think this earnings season and where this earnings season lands and how much damage.
00:32And I think there will be damage to earnings growth expectations through this earnings season.
00:37How much that gets shifts shifts down.
00:40That is going to be the key thing for the next few weeks.
00:42What about Europe? What about the United States?
00:44Earnings expectations in the States are extraordinarily high.
00:46They are. Yes. I think for the U.S. and to an extent for Europe as well.
00:51The key part that has not yet seen any shift in that earnings is in the consumer space.
00:56And I'm finding that hard to reconcile, particularly if you think about interest rate and interest rate sensitivity.
01:02And then on top of that, inflationary impact of what we've seen in the Middle East.
01:07I think it's that consumer space that is the one that we really, really need to watch.
01:12You know, what we've seen and we saw this yesterday is you see the cyclical companies really uptick when you
01:17kind of see a risk on day.
01:19And to me, that feels a little bit overconfident.
01:21And again, how much we will see a normalization.
01:24That is the area that probably worries me the most.
01:27The consumer names and to an extent some of those cyclical names that are not exposed to the structural themes
01:33that we've been talking about through the last 12 months of AI in particular.
01:37So that is the area that we need to watch.
01:39And if we see a real softening there, that is when I will get nervous about exactly where the index
01:44might end the year.
01:45So that is when I will get nervous about it.
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