The upcoming U.S. earnings season is likely to be better than expected for major U.S. corporates, investor and strategist Dennis Gartman told CNBC Tuesday.
“Are we going to see 5-10 percent growth in earnings by almost all of the S&P 500 ? Probably,” Gartman, the author of The Gartman Letter, said.
He believes that current predictions of up to 2 percent growth in numbers are “probably a bit on the downside.” Earnings for the last quarter of 2011 surprised investors by being better than expected, with 63 percent of S&P 500 companies beating earnings estimates.
Earnings in the index surged by 19 percent in the first quarter of 2011.
“We are not going to replicate 19 percent for a long time,” Gartman said. He added that aluminium company Alcoa’s numbers, expected later Tuesday, are “probably” going to be horrible.
Weaker-than-expected U.S. jobs figures on Friday sent stock markets down Monday, in one of the year’s lowest-volume trading days to date.
“Everybody got this one wrong,” Gartman said, admitting he missed the number by a “large amount.”
He added that the response was an “over-reaction” because of the long Easter weekend.
“We are adding jobs, a smaller number than hoped. When the next numbers come out, hopefully we will see this month’s revised upwards,” he said.