An amazing start to the fourth quarter earnings season

Wall Street couldn’t ask for a better start to the earnings season. About 35 S & P 500 have reported fourth-quarter results thus far. Of those, more than 25 have exceeded expectations on the bottom line, according to FactSet. Many of those beats came from the largest U.S. banks. Goldman Sachs and JPMorgan Chase reported earnings that were 46% and 18% above their respective consensus estimates, FactSet data shows. Morgan Stanley’s bottom line was 31% above expectations. Bank of America , Citigroup and PNC posted earnings that topped what analysts were looking for, as well. “The earnings season is off to a strong start,” wrote Louis Navellier, CIO of Nevada-based money management firm Navellier. “With the Magnificent 7 earnings for 2025 expected to decelerate vs ’24 while the other 493 names are accelerating, we may be looking at a year with indexes modestly higher, with Big Tech weighing down the averages while many smaller names are having a very good year,” he said. And while it’s still a small sample, the year-over-year earnings growth rate of the S & P 500 companies that have posted Q4 results sits above 61%. The blended growth rate, which factors in estimates for companies that haven’t reported yet along with those that have already released their figures, shows that earnings are on track to have grown 12.3% year over year in the December quarter. This strong start to the latest earnings season comes after a record year for stocks. The Dow Jones Industrial Average, S & P 500 and Nasdaq Composite all hit record highs in 2024. Coming into 2025, some investors were concerned that valuations may be too steep — especially if the Federal Reserve is unable to cut interest rates as much as Wall Street hopes. However, Solita Marcelli, chief investment officer for the Americas at UBS’ wealth management division, expects profits to stay strong throughout 2025 as the economy remains on solid footing. “The stronger-than-expected payrolls for December last week unnerved markets, but what the labor report and other recent data showcased is a fundamentally healthy economy,” Marcelli said. “The strength of the U.S. economy has historically correlated with earnings growth, and we expect robust profit growth of 9% for S & P 500 companies this year amid resilient economic activity.” Elsewhere Thursday morning on Wall Street, Wolfe Research downgraded AMD to peer perform from outperform . “We were early in noting that AMD’s datacenter GPU business is running below expectations,” the Wolfe analyst wrote clients on Thursday. “Our rating is now catching up to that view.”

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