Why Investors May Not Want to Get Swept Into the Earnings Season Hype: Wells Fargo

The U.S. stock market is gearing up for third-quarter earnings reporting season, but a Wells Fargo Investment Institute strategist suggests that investors shouldn’t get carried away by the hype, as there isn’t likely to be “a big earnings surprise” for the market as a whole.

“…investors need to realize that in an economy experiencing moderate growth and easing inflationary pressures, actual results for most companies are unlikely to differ greatly from guidance,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute. .

That’s because when the economy gradually slows, most individual company analysts “have an easier time” confirming the guidance their companies are giving when it comes to revenue and earnings, Wren said in a client note Wednesday.