US firms recently concluded an impressive earnings season, boasting 28% profit growth. However, this performance is expected to be overshadowed by their Canadian counterparts in the upcoming reporting periods.
According to data compiled by Bloomberg Intelligence, members of the S&P/TSX Composite Index are forecast to achieve 36.4% growth in their second-quarter disclosures, followed by an even stronger 40% in the third quarter. This projected surge would represent the most significant increase for the Canadian stocks benchmark since the recovery phase following the Covid-19 pandemic in 2021.
This shift highlights a potential new focus for investors, moving attention north of the border after a strong, but perhaps peaking, US earnings run. While US companies delivered a solid quarter, some results were met with lukewarm reception amid concerns that growth rates might have reached their peak, as noted in previous analyses. This contrasts with the anticipated acceleration in Canadian corporate profitability.
