Earnings Are in a Good Place, But Without Much Momentum: JPM's Kelly

The video discusses the reliability of earnings expectations, noting that a high percentage of companies meet or exceed these expectations each quarter. It analyzes market cap and earnings growth, predicting low single-digit growth assuming economic stability. The outlook for 2021 suggests that earnings expectations for 2020 may need adjustment. Analysts often start pessimistic and become more optimistic, affecting estimates. Despite high margins, investors should be cautious as maintaining these margins is challenging.

What percentage of companies typically meet or exceed earnings expectations each quarter?

• 60%

• 70%

• 50%

• 90%

What is the expected earnings growth going forward, assuming the economy continues to grow?

• High double-digit growth

• Low single-digit growth

• Negative growth

• No growth

What are the two narratives for 2021 regarding earnings expectations for 2020?

• Expectations are irrelevant

• Expectations are too high and need to be adjusted

• Expectations are too low and need to be increased

• Expectations need to come down or are already factored in

How do analysts typically behave regarding earnings expectations?

• They start pessimistic and become more optimistic

• They are always optimistic

• They are always pessimistic

• They start optimistic and become more pessimistic

What should stock investors be cautious about according to the final section?

• Low market cap

• Difficulty in maintaining high margins

• Increasing share buybacks

• High GDP levels