We have just experienced one of the stronger reporting periods in the past 20 years with corporate earnings upgraded in the low single digits, compared with most reporting periods which are dominated by downgrades. The strength was supported by exceptional upgrades in the commodity and financial sectors, offset by smaller downgrades in industrials.

Most corporates have enjoyed big revenue upgrades, but this has been offset in some cases by a big escalation in costs. EBITDA margin forecasts have declined marginally across the board and wages appear to be the one cost that is harder to offset or pass through.

Tribeca’s Jun Bei Liu and Redpoint’s Max Cappetta share their ‘stocks to watch’ with Firstlinks.

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