Research & Insights

“We’re at an interesting juncture as we head into the Q2  earnings season. Q1 performances and persistent executive talk of second-half strength boosted confidence and gave the markets a new lease on life after a year of downshifting in 2022. At the same time, concerns about rising interest rates are proliferating, recessionary fears persisting, and management tone — heard as more upbeat last quarter — has tempered. With valuations at these levels, the market is primed more for perfection than not. Even with the obvious risk factors out there, including the continued inversion of the yield curve and its lingering potential implications for the banking sector and broader economy, along with diverging consumer credit and savings, there are some bright spots. Despite cost cutting actions, companies continue to reinvest at relatively high levels and while concerns over a “white collar recession” emerge with mounting reports of layoffs, the consumer continues to spend amid still-strong employment trends. With microcycles becoming more in focus, companies have the ability to demonstrate differentiation. Reinforcing strategy and execution in support of long-term growth, addressing near-term actions to protect profitability and managing expectations at this hairpin turn will serve to build management credibility.“

Q2’23 Earnings Primer^®
Rebecca Corbin, Founder and CEO