US deadlock weighs on confidence
Intel, Goldman Sachs, Bank of America expected to report declines in earnings per share
Anxiety over this Thursday’s deadline for the US to raise its debt ceiling is starting to eat away at investor confidence as agreement in Washington has still not being reached.
Various surveys and volatility indexes – used to measure investor anxiety – conducted in the US last week showed the deadlock was weighing heavily on investor confidence.
Less than a week into the third-quarter earnings season, concerns for whether congress will raise the debt ceiling, along with the continuing US government shutdown, are taking their toll on stocks, with both the Dow and S&P falling in a number of recent sessions.
America’s largest aluminium producer Alcoa marked the unofficial start of the third-quarter reporting season in the US after the close of New York trading last Tuesday.
Ahead of the second-quarter earnings season, profit warnings outnumbered positive statements by the most since 2001. While this quarter was slightly improved, warnings still outnumbered good news.
Analysts are forecasting S&P 500 companies to report earnings of barely more than 3 per cent – substantially lower than estimates at the beginning of 2013 which were closer to 10 per cent.