-- Quarterly results of an initial batch of S&P 500 companies indicated a solid start to the reporting season, Oppenheimer Asset Management said in a report on Monday.
Some 46 companies, or 9% of the large-cap index' constituents, have so far reported financial results in the current cycle, with earnings and sales up around 32% and 13% year over year, respectively, according to the report.
Ahead of the reporting season, FactSet put expected earnings growth at 12.6% from a year earlier, according to Oppenheimer.
"It's too early to draw conclusions about first quarter results, but the quarter appears to be off to a good start," Oppenheimer Asset Management Chief Investment Strategist John Stoltzfus said.
The brokerage highlighted "outsized" results at some companies.
The technology sector led the earnings growth so far, with reports from five companies showing a 134% surge in profits year over year, followed by communication services' 84% jump, the Oppenheimer note showed. Technology was also ahead of all other sectors in terms of revenue, so far delivering growth of about 44%.
Some 94 S&P 500 companies are scheduled to release their quarterly financials this week, according the brokerage. Those include Tesla (TSLA), Intel (INTC), IBM (IBM), Texas Instruments (TXN), Philip Morris International (PM), Procter & Gamble (PG), GE Aerospace (GE), UnitedHealth Group (UNH), and RTX (RTX).
On Friday, the S&P 500 and the Nasdaq Composite notched new peaks after Iran announced a temporary reopening of the Strait of Hormuz, sending oil prices tumbling. Oil prices rose Monday following an apparent flare-up between the US and Iran ahead of the expiration of their ceasefire agreement this week.
"Our view remains that the recent positive returns of the major US equity indices continue to find support in the overall resilience of the US economy and corporate earnings reports even as some sensitivity to headline risk remains while (peace) negotiations move ahead," Stoltzfus said.
The US is sending negotiators to Pakistan for a second round of peace talks, but Iran said it didn't plan to participate in those negotiations.
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