HSBC Global Research forecasted in a research note that earnings for the S&P 500 index will grow by 9% in 2Q24, the highest rate of growth since 1Q22. Noting that earnings growth over the past few quarters has been driven by the "Magnificant 7" and other technology stocks, the broker expected corporate guidance to be a key focus for investors in 2H24 as market expectations have been raised ahead of the upcoming results period.
According to the report, technology and the Magnificant 7 stocks are still expected to deliver strong performance, with earnings growth expected to exceed 20%. Meanwhile, excluding the contribution by the Magnificant 7, HSBC forecasted S&P 500 earnings to grow 6% YoY in 2Q, with sequential improvements in corporate earnings per share expected in 7 of the 11 S&P 500 sectors, namely communication services, consumer discretionary, consumer staples, energy, healthcare, industrials and raw materials. The energy and healthcare sectors are predicted to reverse their declines, posting growth of 9% and 18% respectively.
