Third-Quarter Earnings Season Begins Next Week and May Deliver Very Good News for the Market
2026-10-08 18:10
•Matthew Benjamin •The Motley Fool
•• • Axe Cap view
Q3 Earnings Set to Boost Risk Appetite, But Watch Rand Sensitivity
Strong US earnings could stabilize global sentiment, with nuanced implications for the JSE and USD/ZAR.
The US S&P 500 is expected to report almost 30% earnings growth in Q3—a remarkable rebound that rarely goes unnoticed. For South African investors, the local bourse often listens to Washington’s corporate updates more than we imagine. Robust profits in sectors like energy and materials align well with South Africa’s resources-heavy JSE, shining a light on miners such as AngloGold Ashanti and Barloworld. Meanwhile, growth in communications and IT giants overseas may temper the mood for names like Naspers and Prosus, already under pressure from global tech volatility. The key wildcard remains the rand. A stronger USD driven by positive US earnings could keep USD/ZAR elevated, making imports pricier and pressuring consumer-facing counters like Shoprite and Woolworths. However, if U.S. optimism spurs investment inflows, the rand could bounce back, benefiting banks like Standard Bank and Sanlam. We prefer watching the first batch of earnings prints carefully—momentum could shift quickly. Importantly, a stumble in US inflation data or geopolitical risks could undercut this optimistic scenario. this is just our opinion and not financial advice
We favor selective buying in resource counters such as AngloGold Ashanti and Barloworld, while adopting a wait-and-see stance on high-beta names like Naspers until the earnings season unfolds. Keep an eye on the rand, as USD/ZAR moves will impact local consumer stocks materially.
- AngloGold Ashanti
- Barloworld
- USD/ZAR
- Naspers
- US inflation surprises denting earnings optimism
- Geopolitical tensions spooking markets and rand weakness
6/10
Third-quarter earnings season begins the week of October 12, with S&P 500 companies expected to post 29.5% year-over-year earnings growth—the third consecutive quarter above 25%. Earnings estimates have been revised upward throughout the quarter, and all 11 sectors are projected to show growth, with five sectors (energy, IT, communications, materials, and industrials) expected to post double-digit gains. Strong earnings typically support higher stock prices.
Our take is based on reporting first published by The Motley Fool.
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