Deutsche Bank Predicts Positive Surprises in US Q4 Earnings


  • Strategists from Deutsche Bank hint at an excessively negative consensus estimate for the fourth-quarter U.S. earnings.
  • Potential for notable positive surprises from the American corporate sector.
  • Anticipation of a 7.4% decrease in S&P 500 earnings per share compared to Q3, marking one of the most significant declines outside of recessionary periods.
  • Expectations lean towards considerable growth leading to major beats over excessively gloomy consensus.
  • Forecasts of substantial double-digit annual growth, partially propelled by base effects.

Deutsche Bank’s Positive Outlook

Strategists at Deutsche Bank believe that the commercial sector in the U.S. could bring about significant positive surprises. Their belief stems from the premise that the consensus estimate for U.S. Q4 earnings may have been overly pessimistic.

Expected Decline in Q4 Earnings

Despite the traditionally strong Q4, the strategists are forecasting a 7.4% fall in S&P 500 earnings per share compared to Q3. They note this as one of the largest declines, save for recession periods, when examined on a quarter-to-quarter basis.

Anticipated Robust Growth

In their forecast, they underscore the potential for powerful growth that could result in significant beats over the unduly pessimistic consensus. “We anticipate strong double-digit year-on-year growth, partially driven by base effects,” they maintain.

Cautioning over Earnings-Season Rally

However, they advise caution as the typical earnings-season rally may be dampened by the market’s recent sharp rise and the current equity positioning.

In the context of forex and trading, this anticipated robust growth in the U.S. corporate sector could have a positive influence on the U.S. dollar’s strength. Thus, traders may want to keep an eye on USD-paired assets.

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