Currently, analysts have been reducing their estimates for the S&P 500 earnings for the latter part of this year and there is a strong possibility for the index’s earnings to turn negative for 2019. Previously, over the most recent two weeks, Goldman Sachs and Citigroup strategists have lowered the index’s earnings estimates for the current and the next year. They mentioned a slowing economy, dangers of a trade war and the possible weakening in the case of currency.

Furthermore, experts who examine individual stocks have also started to reduce their estimates in sectors which have experienced the largest impact of global growth and rates. They are the sectors who have been experiencing rapid declines in the past couple of weeks such as the energy, technology, financials and industrials.

Additionally, a number of sectors are involved with individual companies that are  linked indirectly to global trade and tariffs. An example of this is the industrial earnings which are convoluted, as a result of individual matters, such as Boeing and the case regarding the 737 Max8 jets. Earnings for the third-quarter are presumed to fall 38.5% from its what was expected previously this year.

Moreover, the Amazon has also witnessed a significant decline when it comes to earnings for the third-quarter following its July 25th report that has affected its earnings within the consumer discretionary sector.

Nevertheless, tariffs are a significant attraction for corporate America. John Butters of FactSet has noted that among the companies in the S&P 500, around one-fourth have mentioned the word “tariff” during earnings calls for the year’s second quarter, a 40% leap out of the second quarter.

By: Cyril Latrice Cajanding