LIVE MARKETS-Earnings can shield equities from geopolitical noise

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EARNINGS CAN SHIELD EQUITIES FROM GEOPOLITICAL NOISE

Volatility has been reintroduced into equity markets this week after Trump's threats on Greenland, but Barclays strategists say earnings resilience can help equities shrug off the geopolitical noise.

"The Q4 earnings season is upon us and should help refocus investors towards fundamentals...the bar has been lowered and beats are likely," Barclays says.

Equities, until this week, have had a strong run, which Barclays believes could mean companies will not only have to beat expectations, but raise forecasts, for stocks to push much higher.

And there are other risks too. Threats to the Fed's independence linger and rising global bond yields are a cause for concern, Barclays notes, but that shouldn't hold stocks back too much if earnings are ok.

"To summarise, against rising geopolitical noise, limited valuation support, and ever watchful bond vigilantes, earnings strength offers the pathway for further equity upside, in our view," they add.

(Samuel Indyk)

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