Strong earnings season keeps shares close to record levels

Stock markets are heading into autumn close to record levels, most recently supported by a strong earnings season. The positive development has also boosted returns for PFA’s customers, with many having achieved double-digit returns year to date.

Global financial markets have shown considerable strength over the summer and companies have delivered in spades. At present, no fewer than 86 per cent of the companies in the benchmark US S&P 500 index have exceeded equity analysts’ earnings expectations.

“We are seeing one of the strongest earnings seasons since 2021, with broad-based progress and a historically high proportion of companies exceeding expectations for their earnings. This can also be seen in the equity markets, with the S&P 500 close to record levels. We are pleased about this on behalf of our pension customers, who have benefited significantly from the progress,” says Tine Choi Danielsen.

At PFA, the return for a typical customer with medium risk is just over 10 per cent, while the three-year return has exceeded 42 per cent – giving customers’ savings a significant boost.

Solid economic indicators – but autumn has put pressure on shares in the past
According to PFA’s chief strategist, the progress is also supported by US macroeconomic indicators. Despite emerging cracks, the labour market still looks sound and the latest figures from the manufacturing sector also paint a picture of robust economic growth. In addition, new inflation figures were released yesterday, showing that consumer price inflation in the US had cooled to 3.4 per cent in July.

However, there are still risk factors that investors are keeping a close eye on, the chief strategist points out:

“The economy looks robust, but strong activity in the industrial sector and the unrest in the Middle East are also fuelling fears of inflation. This is directly reflected in the US, where long-term interest rates have once again settled at a level we have not seen for a year and a half. This could create a need for financial restraint and dampen growth and consumption in the longer term,” says Tine Choi Danielsen.

At the same time, she points out that the markets are now entering a historically challenging time of year.

“September, October and November have historically been among the worst months for the equity market and we have seen that it does not take much to tip the balance and affect sentiment in a negative direction. That said, the overall outlook for 2026 remains positive. We have a fundamentally robust economy and this is being strongly confirmed by the solid results we have seen from companies,” she concludes.