S& P 500 hits all time highs U.S.-Japan trade deal optimism
Ivnesting.com -- A report by Deutsche Bank (ETR:DBKGn) highlighted the state of global earnings, with a focus on the S&P 500 and regional performance.
The report noted a modest deceleration in global earnings growth from 9.2% in Q4 to 7.1% in Q1, yet growth remained within the healthy range observed throughout 2024. S&P 500 earnings demonstrated resilience, with year-over-year growth of 9.8% in Q1, slightly down from the previous quarter’s 13.5%.
The analysis revealed that earnings beats were above average globally, with the aggregate size of beats well above historical norms. Excluding the Energy sector, which saw negative growth across all regions, global earnings growth for Q1 stood at 10%, marking the sixth consecutive quarter of double-digit expansion. Regionally, Japan, the United States, and Emerging Markets (EM) continued to exhibit robust growth, while Europe’s growth remained stagnant, near zero.
Despite Europe’s ongoing struggle with weak earnings growth, the first quarter of 2025 showed a marginal sequential rise in earnings levels, contrasting with a slight sequential decline in the United States. This could signal a potential turning point for Europe, which has experienced nearly two years of weak performance.
Looking ahead, consensus estimates for Q2 have been significantly downgraded outside of EM. Europe faced the sharpest cut at 6%, with Japan and the United States also seeing downgrades. Estimates for 2025 have similarly been revised downwards, except for EM, which has been only modestly affected thanks to upgrades in India, Taiwan, and Korea balancing out cuts in China, EMEA, and Latam.
The consensus view for 2025 suggests that Europe will continue to lag behind, with expected earnings growth in the low single digits at 2.3%. In contrast, EM is projected to lead with a solid 10.4% growth, followed by the United States at 7.1%, and Japan at 6.1%.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.