Investing.com -- RBC Capital Markets highlighted three major developments in financial markets, pointing to stability in earnings trends, ongoing macroeconomic uncertainty, and deteriorating investor sentiment.
Firstly, corporate earnings statistics for the fourth-quarter 2024 reporting season showed little change, with companies beating consensus earnings-per-share estimates continuing to outperform. However, the consensus S&P 500 EPS forecast for 2025 edged slightly lower, now below $271.
Secondly, RBC analysts flagged continued uncertainty around policy, tariffs, and foreign exchange (FX), which dominated corporate earnings calls. Investors remain cautious amid evolving geopolitical and trade policy risks.
Finally, investor sentiment has weakened, with the latest American Association of Individual Investors (AAII) survey reflecting declining confidence. Small business optimism has also softened, and fund flow data suggests cautious positioning, with U.S. equity inflows slowing while bond fund inflows rise.
Despite these headwinds, RBC noted that the S&P 500 remains near record highs, suggesting a "wait-and-see" approach among market participants.
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