Back here again, already? Time does fly when you’re having fun. Only two weeks since the Brexit vote, major US companies are already lined up to report their latest quarterly profits and tell shareholders next week how optimistic they feel about the future. This can have a huge impact on share prices this side of the pond and we are sure that certain key sectors are set to deliver big responses to the tone of corporate message offered by management. And with consensus tending to be guided down by US companies, the tendency is for results to beat expectations and share prices rally, making for a nice positive impact on UK and European peers.

First up as always on Monday night (11 July) is US aluminium giant Alcoa (AA) which, much like the price of copper and sales of excavation equipment by Caterpillar (CAT), is considered a barometer for the mining sector and global growth. Sales and profits are forecast slightly higher than the prior quarter but in the red versus last year, for the fourth-straight quarter. Weak aluminium prices and reduced demand from aerospace is seen weighing. But, as always, while financials are important, the outlook is probably more influential with share prices being all about future income streams, not past financials.

Next up of significance to the UK markets (Weds 13 July) will be luxury goods retailer Burberry (BRBY) and housebuilder Barratt Developments (BDEV), the former having performed well since the Brexit vote thanks to its international exposure and middle class growth in emerging markets, while the latter is still under the cosh from perceived pressure on the UK housing market.

Towards the back end of the week is when it gets really interesting with investor favourites the Banks getting their say. Thursday (14 July) sees US giant JPMorgan (JPM) open proceedings, letting us know how trading it has performed on the trading front and most importantly how it views the rest of the year. It is worried about Brexit? Has it seen a marked change in behaviour by clients. Note the bank has exceeded earnings expectations in four of the past five quarters, with positive knock-ons for UK and European investment bank shares.

 Strong results from smaller bank Jefferies a few weeks ago showed a sharp Q2 bounce in fixed income trading following a weak Q1, which bodes well, but consensus still expects weakness in JPM’s overall trading and investment banking underwriting to weigh heavily on profits. Investment giant Blackrock’s (BLK) version of events will also be keenly listened to given the big movements we have seen in global financial markets and across the asset classes. Thereafter, to finish the week, we have Wells Fargo (WFG) and Citigroup (C) offering their own updates from the investment banking arena (Fri 15 Jul). And well-known Goldman Sachs (GS) and Morgan Stanley (MS) will do the same the following week (19 and 20 Jul, respectively).

With so much having happened in Q2 and the outlook for companies, banks and indeed central banks so different in this new post-Brexit era, what we hear from well-known corporates could be what makes or breaks the markets in terms of boosting or crushing sentiment. Being aware of what expectations are and how results compare is key to protecting your portfolio and being on the right side the trade in both the run-up to and following the announcement. That’s our job and what you deserve. If you are not getting it already, get access to our well-respected research to make sure you are fully prepared for one of the most important global earnings seasons in a very long time. Share prices could be set for more huge moves like we have seen since Brexit. Don’t miss out. We look forward to speaking to you next week.

Mike van Dulken, Head of Research, 8 July