02:00 PM EDT, 08/19/2024 (MT Newswires) -- The S&P 500 companies' latest quarterly financial results have showed "a fairly robust" increase in earnings as the reporting season approaches its end, Oppenheimer Asset Management said Monday.

Almost 463 companies in the benchmark equity index had posted results as of Friday, with earnings up 8.5% year over year on revenue growth of 4.8%, the brokerage said. Companies continued to "largely better" analyst estimates, Oppenheimer Asset Management Chief Investment Strategist John Stoltzfus said in a Monday note to clients. Results have "surprised to the upside" overall, he added.

Barring materials and industrials, all S&P 500 sectors logged year-over-year bottom-line gains, led by health care's 17% jump and consumer discretionary's 16% rise. Utilities and financials' earnings are also up by double-digit percentages. In terms of sales, energy and health care logged annual gains of more than 7% each, while only industrials and materials have seen declines, the report showed.

Only 15 companies are scheduled to report results this week, with 16 slated for next week. Palo Alto Networks ( PANW ) is scheduled to report after Monday's closing bell, while Intuit (INTU), TJX (TJX), Lowe's (LOW), Analog Devices ( ADI ) and Target ( TGT ) will be reporting later this week.

Federal Reserve Chair Jerome Powell's remarks on Friday at the annual economic symposium in Jackson Hole, Wyoming, will be a key focus for markets this week amid expectations that policymakers could lower their benchmark lending rate by up to 50 basis points next month, Stoltzfus said.

Markets are pricing in a roughly 78% probability that the central bank's Federal Open Market Committee will cut interest rates by 25 basis points in September, with the remaining odds in the favor of a more aggressive 50-basis-point reduction, according to the CME FedWatch tool.

"With many folks now looking for a cut of as much as 50 (basis points) in September, a degree of hesitancy in the chair's remarks could reintroduce some volatility into the market ahead of next weekend," Stoltzfus wrote. In a bid to tame inflation, the FOMC tightened monetary policy by 525 basis points from March 2022 through July 2023, but has since kept interest rates unchanged, with its latest pause coming late last month.

Stoltzfus said a 25-basis-point cut next month would be more likely as last week's initial jobless claims and continuing claims data, along with the advance retail sales report, indicated economic resilience. "The data looked to us to exhibit enough momentum in the economy to elicit greater confidence from the Fed in the economy's vigor to favor a (25-basis-point) cut in September while saving a realistic potential for a further cut of 25 (basis points) for either in November or December," Stoltzfus said.

Any hint by Powell regarding a lack of monetary policy easing in September could "reintroduce a tantrum reaction, particularly from highly leveraged players in the market," Stoltzfus said. On the other hand, a 50-basis-point cut could raise concerns that policymakers feel they've waited too long to ease policy and would need to catch up in lowering rates to avoid pushing the economy into a recession, Stoltzfus wrote.

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