Earnings Risks May Be Skewed to Downside, BNY Mellon's Young Says

The video discusses the market's reaction to earnings, highlighting that negatives are punished more than positives. It explores the potential for an earnings recession, driven by macro headlines rather than actual events. The discussion includes sector potential for re-rating earnings expectations and the risks involved. Despite under promising and over delivering, market reactions remain muted due to pressures from trade, costs, and global growth. The overall earnings growth for the year is expected to be below average, with a focus on the back half of the year.

What is the market's reaction to negative earnings in the first and second quarters?

• The market is equally rewarding negatives and positives.

• The market is indifferent to earnings results.

• The market is punishing negatives more than rewarding positives.

• The market is rewarding negatives more than positives.

What is driving the market's 20% rise despite negative earnings growth?

• Actual economic events

• Macro headlines and expectations

• Increased consumer spending

• Government interventions

What is the trend observed in sectors regarding earnings expectations?

• No significant changes

• Consistent with expectations

• Under-promising and over-delivering

• Over-promising and under-delivering

What factors are putting pressure on market guidance despite positive outcomes?

• Trade, costs, and global growth

• Technological advancements

• Environmental concerns

• Political stability

What is the expected average earnings growth for the full year compared to the S&P average?

• Above average at 8%

• Below average at 2.6%

• Equal to the average at 6%

• Significantly above average at 10%