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The highs are in for earnings and margins

And that means it's time to add quality names

3 Aug 2022

We're in thick of earnings season in the United States and Europe. But with so much information to digest, how can you separate the signal from the noise? Bob Desmond, portfolio manager at Claremont Global, is a stock picker who’s been keeping a closer eye than most on what’s been going on. And his assessment of what’s been seen so far? Pretty good, relative to very poor expectations heading in, especially in the largest equity market in the world, the United States. In a wide-ranging discussion, Bob discusses the results from the companies he tracks, giving his opinion on valuations and whether it’s been enough to make tweaks to the portfolio. And while he’s reluctant to give macro views, he discusses whether central banks may overcook things when it comes to tackling inflation, what he likes to watch to evaluate supply chain disruptions and consumer demand, along with whether we’re like to see earnings estimates revised lower, potentially leading to another leg lower for shares. Broadly, he thinks we’re at peak margins and earnings, pointing to the need for investors to trade up to quality companies after the recent market correction.