What to expect during the Q3 Earning Season in 2024 

As of early November 2024, the Q3 earnings season has presented a mixed picture across various sectors. While many companies have exceeded earnings expectations, the extent of these surprises has been modest.

Large-cap companies, especially in tech, healthcare, and consumer staples, have largely outperformed expectations. However, sectors like energy, financial services, and industrials have encountered expected headwinds, facing pressures from fluctuating oil prices, tightening net interest margins, and softening demand.

The technology sector has maintained its growth trajectory, largely due to continued demand for artificial intelligence, which has fuelled both investor interest and sector performance.

What to look out for in November

As Q3 earnings season winds down, traders should continue to look for sector-specific opportunities and pay close attention to forward guidance as companies look ahead to Q4 and beyond.

Several key elements will shape market conditions and trading strategies for the rest of the year:

Technology remains a key sector to watch, with strong fundamentals and demand drivers likely to persist. While Q3 2024 earnings reports have largely aligned with anticipated market growth, traders should monitor valuation pressures and potential earnings downgrades that could impact high-growth tech stocks.

Energy stocks may experience heightened volatility due to global geopolitical risks, particularly in the Middle East, which could significantly impact oil prices.

Financial services remain sensitive to inflationary pressures and the Federal Reserve's monetary policy guidance, adding additional risk for investors.

The U.S. midterm elections in November could have sector-specific impacts, particularly for energy and healthcare. Any unexpected shifts or updates could have broader implications for financial services and the overall market.

What to expect from Q3 earnings

The S&P 500 is set for another quarter of growth, with projected earnings and revenue increases of 4.6% and 4.8%, respectively for Q3 2024. This marks the fifth consecutive quarter of growth for the index.

Despite the overall market optimism, sector performance is diverging. Information Technology and Healthcare are primed for strong growth, while the Energy sector is facing significant challenges. Although oil prices declined during Q3, recent geopolitical events in the Middle East have led to a rebound.

Q3 earnings estimates have been revised downward by 3.2% from initial projections, marking a more significant decline compared to previous quarters. Several companies have issued negative EPS guidance, reflecting sector-specific challenges and underlying market uncertainty. Despite this, analysts remain optimistic, projecting double-digit earnings growth for both 2024 and 2025.

Spotlight on banking

Major banks are currently facing significant pressure on net interest income due to the Federal Reserve's easing monetary policy, which has compressed net interest margins. Concerns about credit quality are also on the rise, driven by cumulative inflation and a weakening labour market.

However, the easing monetary policy may present long-term opportunities for banks to navigate these pressures more effectively.

Tech Giants Lead the Way

The tech sector is expected to deliver strong Q3 results, primarily driven by the Magnificent 7. These leading tech companies, representing over 20% of S&P 500 earnings, significantly impact the overall market. NVIDIA, a key driver of the broader tech sector's performance (which itself contributes nearly 40% of S&P 500 earnings), is expected to play a pivotal role in this positive outlook.

What to watch for in Q4

Analysts forecast an acceleration in Q4 earnings growth, setting the stage for a stronger overall market. Sectors like Energy and Banking will be key to watch as economic conditions evolve.

The outcome of the 2024 US elections could have a significantly impact on energy stocks, as the two parties have distinct energy policies. In 2020, Joe Biden's climate change focus boosted renewable energy stocks, while several fossil fuel stocks declined. Conversely, Donald Trump's pro-fossil fuel stance in 2016 led to a surge in energy stock prices.

As earnings season progresses, it's important for market participants to monitor geopolitical events in the Middle East, as these can influence oil prices. Monitoring sector-specific performance trends could provide opportunities to adjust CFD strategies accordingly.

Earnings Calendar for November 2024

Source: Bloomberg Terminal  

5 stocks to watch in November

Several notable companies, including retail giants Walmart and Best Buy, as well as generative AI leader NVIDIA, are still set to release their earnings reports in November. The performance of the retail companies will provide crucial insights into consumer spending trends ahead of the holiday season, a key economic driver for Q4.

1. Spotify Tech (12 November)

Spotify is projected to report significant earnings growth, with analysts expecting a nearly 400% year-over-year increase in earnings per share. Investors will be closely watching subscriber growth, advertising revenue, and profitability metrics. The music-streaming service operator is expected to post quarterly earnings of $1.68 per share.

2. Walt Disney (14 November)

Analysts anticipate insights into Disney's streaming services, especially Disney+, as well as performance metrics from its theme parks and studio entertainment divisions. The company's recent collaborations, such as the partnership with Walmart Canada to offer Disney+ subscriptions, may also impact revenue streams. The American multinational mass media and entertainment conglomerate is expected to post earnings of $1.10 per share.

3. Walmart (19 November)

Investors are eager to see updates on Walmart's e-commerce growth, supply chain efficiencies, and performance during the crucial back-to-school season. The company's recent partnerships with Disney+, Expedia, and Spotify could significantly impact customer engagement and sales. The American multinational retail corporation is expected to post earnings of $0.525 per share.

4. NVIDIA (20 November)

NVIDIA is expected to report strong earnings, fuelled by its dominance in the AI and GPU markets. Analysts are particularly interested in the demand for NVIDIA's new Blackwell chips and the company's performance in the data centre segment. Investors will be closely watching NVIDIA's ability to maintain its impressive gross margin, which was reported at 75% last quarter. The AI boom protagonist is expected to post earnings of $0.74 per share, a year-over-year increase of 85%. However, revenue growth is expected to be slower than the recent triple-digit rates.

5. Best Buy (26 November)

Best Buy's earnings will likely reflect consumer electronics demand, particularly ahead of the crucial holiday season. The company has previously reported declines in comparable sales, which may continue to impact overall revenue growth. Analysts will focus on e-commerce growth, in-store sales performance, and inventory management strategies. Analysts forecast an EPS of $1.29.

How to trade the earnings season with Axi

Axi offers access to CFDs on 495+ global markets, including shares like NVIDIA (NVD), JPMorgan (JPM), Goldman Sachs (GS), Tesla (TSLA), Alphabet (GOOGL), Apple (AAPL), Amazon (AMZN), Meta Platforms (MVRS), Microsoft (MSFT), Exxon Mobil (XOM), and Walt Disney (DIS).

To stay informed about company earnings dates and trade the earnings season with Axi: 

1. Track Earnings: Use Axi's Earnings Calendar to stay ahead of the curve. 
2. Monitor & Analyse: Employ Axi's charting tools to monitor stock prices before, during, and after earnings, and analyse market expectations. 
3. Go Long or Short: Speculate on market movements with CFDs, leveraging Axi's reduced fees and tight spreads. 

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This information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. It has been prepared without taking your objectives, financial situation, or needs into account. Any references to past performance and forecasts are not reliable indicators of future results. Axi makes no representation and assumes no liability regarding the accuracy and completeness of the content in this publication. Readers should seek their own advice.  Data is sourced from third party providers.