Analysts Turn Net Negative on US Earnings for First Time in 23 Weeks

Equity analysts have cut more US corporate earnings estimates than they raised for the first time in 23 weeks, ending the longest run of upgrades since September 2021, according to a Citigroup Inc. index. The shift reflects mounting concern over how inflation and higher interest rates will weigh on profits. The downgrades are concentrated in consumer staples, consumer discretionary, materials and financials, said Stephan Kemper, chief investment officer at BNP Paribas Wealth Management Germany, linking the revisions to rising living costs and energy prices. Morgan Stanley strategist Michael Wilson warned this week that the S&P 500 could fall as much as 7% if valuations keep declining and energy prices push monetary policy tighter. The OECD said on Wednesday that global inflation will run faster than forecast in 2027, requiring tighter policy. The Federal Reserve raised US interest rates earlier this month for the first time in three years.