03:29 PM EDT, 08/12/2024 (MT Newswires) -- The S&P 500 companies' latest quarterly financial results have so far helped counter bearish expectations of an earnings recession, Oppenheimer Asset Management said Monday.

Some 455 companies in the benchmark equity index have already reported results in the current cycle, with the overall performance more positive than negative. Firms continue to "largely better" analyst estimates, with nearly 79% delivering a beat, Oppenheimer Asset Management Chief Investment Strategist John Stoltzfus said in a note to clients.

"The prior two earnings season results, like the current one, surprised to the upside with positive earnings growth countering bearish predictions of an earnings recession," Stoltzfus wrote.

S&P 500 companies' earnings in the ongoing season are up 9.3% from a year earlier on revenue growth of 5%, according to the note. Eight of the 11 sectors have seen positive bottom-line growth, with five at double-digit percentage rates, led by consumer discretionary's 19% jump. Materials is down 7.4%. Barring materials and consumer staples, quarterly sales are up on an annual basis for all sectors, led by energy's 7.9% rise, the report showed.

The season is winding down, with only nine companies scheduled to report this week, including retail giants Walmart ( WMT ) and Home Depot ( HD ) , while 14 reports are due next week. Government data are likely to show Wednesday that US consumer inflation rose 0.2% sequentially and 3% annually for July, according to a Bloomberg-compiled consensus. The official producer prices report for last month is scheduled to be released Tuesday.

The upcoming earnings reports and macro data are expected to offer more clarity regarding the extent and timing of monetary policy easing by the Federal Reserve, Oppenheimer said.

The futures market has priced in "a high level" of odds for a 25-basis-point interest-rate cut by the central bank's Federal Open Market Committee next month, Stoltzfus said. "This has been accompanied by an improvement in market sentiment towards equities, helping the S&P 500 regain some of the ground it gave back from its most recent all-time high on July 16." As of Friday, the benchmark equity index was off 5.7% from its mid-July high, according to the report.

"We persist overweight US equities while maintaining some meaningful exposure to international developed and emerging markets as the US central bank moves towards easier policy on greater confidence that its efforts to put untoward levels of inflation in check have been or are near being met," Stoltzfus wrote. "Volatility is to be expected as the economy and the markets navigate economic and monetary policy transition and move towards greater normalization."

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