The stock market has been under pressure due to heightened inflation, the Fed’s policy moves, and the Russia-Ukraine war. However, robust earnings reports should be a significant tailwind for the market. According to data from Refinitiv, the estimated earnings growth rate for the S&P 500 for the fourth quarter of 2021 is 31.5%, with 10 of the 11 sectors in the index expected to see an improvement in earnings compared to the prior-year quarter. Furthermore, of the 472 companies in the S&P 500 that have reported earnings to date for the quarter, as of February 25, 76.9% have surpassed analysts’ earnings estimates.
Job growth accelerated in February, marking the biggest monthly gain since July as employment edges closer to pre-pandemic levels. Nonfarm payrolls for the month grew by 678,000, and the unemployment rate was 3.8%, compared to the estimated 440,000 and 3.9%, respectively, while wages were flat. “The details are bullish for stocks in that job creation remains robust, and the participation rate is moving higher while wages came in soft, potentially taking some pressure off the Fed,” said Adam Crisafulli of Vital Knowledge.
