reporting season

In addition, the recent increase in the debt ceiling has helped to boost sentiment by removing some of the uncertainty that was present in the moment. By raising the debt ceiling, the government ensured continued funding of essential programmes and services, reducing uncertainty and boosting investor confidence in the US economy and its ability to service its obligations.   The market momentum was further supported by a solid first quarter 2023 reporting season. Many companies across sectors reported solid financial results that exceeded analysts' expectations. Overall to date, 99% of S&P 500 companies have reported actual results for the first quarter of 2023. Of these companies, 78% reported actual EPS above estimates, exceeding the 5-year average (77%) and the 10-year average (73%). Collectively, companies report revenues that are 6.5% above estimates, below the 5-year average (8.4%) but above the 10-year average (6.4%). At the sector level, seven sectors saw upward EPS estimates for 2023, led by communications services (+3.1%), consumer services (+2.5%) and information technology (+2.0%).   S&P 500 companies thus performed better than analysts' expectations from Q4 2021, both in the number of companies reporting positive EPS surprises and in the magnitude of these surprises, exceeding the 10-year average.  The strong earnings performance instilled confidence in investors and demonstrated underlying business strength and profitability, which contributed to the upward trajectory of the market.   It is also worth noting the sector rotation that has occurred in the market. Last year, pro-inflationary sectors such as energy, commodities and protective market segments led the way amid concerns about inflation and uncertainty. This year, however, there has been a shift towards growth sectors, particularly technology, semiconductors and communications services, which have taken the lead.