Earnings Season Sees Wide-Ranging Success Across Markets

The second quarter earnings season has shown impressive results across various market segments. US Large-Cap continues to set the standard, but other asset classes are closing in on its high performance. Small-Cap, European, and Japanese equities have demonstrated strong earnings growth, with some even exceeding that of US Large-Cap.

According to data from RiverFront, US Small-cap has seen a significant improvement in its earnings picture, with all three principles showing positive trends. The same is true for Europe, where revenue growth and surprise have shifted from negative to positive across sectors. Japan's earnings strength is notable, with year-over-year earnings growth exceeding 60%, driven by global AI spending and a weak Yen.

However, there are some concerns to consider. Japan has the lowest expected earnings growth over the next 12 months, which could impact its future performance. Additionally, a strengthening Japanese Yen could undermine the country's export-focused economy.