Time flies when geopolitical turmoil, contentious elections, and interest rate cuts keep investors awake at night.

The fourth quarter of 2024 is upon us, and earnings season officially began with big banks JP Morgan and Wells Fargo announcing their latest numbers on Friday (quick recap: They were pretty good).

More announcements are coming in fast and furious this week, but before we dive into the nitty gritty of which stocks are set to pop this earnings season and which are poised to drop, it might be helpful to take a step back and look at the big picture.

Wall Street’s Q3 expectations

Broadly, this quarter’s earnings are expected to be what the pros would call “meh.”

FactSet recently noted that, compared to the historical average, Wall Street analysts have lowered their earnings per share (EPS) expectations heading into this quarter more than usual. While the 5-year average decrease in Q3 EPS estimates runs at 3.3%, this year analysts cut their estimates by 3.9%

That’s not to say this will be a terrible quarter. FactSet also noted that the S&P 500 as a whole should see a 4.2% increase in earnings compared to the same quarter a year ago. However, that’s slower than the 11% year over year earnings growth that the S&P 500 enjoyed in the second quarter.

So what gives? The problem is that stocks are caught at a crossroads this quarter. On the one hand, lower consumer spending and high inflation hurt profits. Just look at PepsiCo, an early reporter that announced softer sales last quarter after customers pulled back on spending.

On the other hand, interest rate cuts spur on economic growth. Rate-sensitive sectors like manufacturing and real estate should get a big boost from lower interest rates, though this earnings season may be too early for cuts to help bottom lines by much.

All in all, the bar is low for Q3 earnings—which may actually be a good thing for investors, since even a small earnings beat will likely surpass expectations enough for a stock to enjoy a solid boost.

But which stocks, exactly?

Watch these sectors

Even if Wall Street isn’t betting on a blowout earnings season, Bank of America analysts can help you find some earnings surprises to really make your portfolio pop this quarter.

They searched for stocks with strong EPS & sales revisions and guidance, as well as sectors with a higher ratio of positive to negative earnings surprises in the previous quarter. All told, their research points them to stocks in the information technology, real estate, and financials sectors as the most likely to post positive earnings surprises this quarter, while stocks in the energy and consumer staples sectors should fall flat.—MR

“Somewhere deep inside the recesses of my skull, I know that interest rates are important for me to understand. Yet, when it comes to discerning these enigmatic semantics, my usual gushing river of interest runs nothing short of bone dry.”

Our very own Dan Toomey of Good Work recently swallowed his revulsion and dove into the wild world of interest rates—what they are, why they matter, and how uninteresting they can really be.

But along the way Dan learned a valuable lesson about this “magical mechanism that can control the economic cosmos and deliver us a stable economy,” as well as why “salt and pepper slender king Jerome Powell” matters to us all.

You’ve heard a lot about interest rates from the Brew Markets team, but you’ve never gotten this extraordinary level of journalism from us (or probably anyone). Watch Dan’s latest video here and enjoy.

There’s a crisp chill in the air, pumpkin spice everything is being shoved down our throats, and the abomination that is candy corn is gracing the aisles of stores across America.

Yup, that’s right—it's Q3 earnings season.

And while we’ve already discussed the big picture, here are some specific stocks that analysts say will emerge as winners among a sea of mediocrity.

According to Bank of America analysts, a handful of companies are most likely to beat expectations based on their current valuations, how much further analysts believe they could run, and Q2 earnings performances.

The analysts searched for stocks that beat on both EPS and revenue last quarter, stocks that they think will beat EPS and revenue expectations even if the rest of Wall Street doesn't, and stocks that Bank of America gives a “buy” rating to.

The results are below:

• Ralph Lauren, reporting Nov. 8
• Meta Platforms, reporting Oct. 30
• Thermo Fisher Scientific, reporting Oct. 23
• 3M Co, reporting Oct. 22
• DTE Energy Co, reporting Nov. 1
• Qualcomm, reporting Nov. 6

But if BofA didn’t convince you, that’s fine. We’ll try another bank.

Goldman Sachs analysts parsed through options activity to find the companies that the market believes could move higher after their earnings announcements. They then whittled those down to stocks that have a “buy” rating from the firm’s analysts.

• Gap, reporting Nov. 15
• Citi, reporting Oct. 15
• Boston Scientific, reporting Oct. 23
• Broadcom, reporting Dec. 6
• Nvidia (surprise, surprise), reporting Nov. 21

So get on your jacket, jump in a pile of leaves, and prepare your portfolio for earnings season by buying these stocks ASAP.—LB

We’re back to our regularly scheduled programming tomorrow, just in time for earnings season to hit markets like a ton of bricks. There are a bunch of big announcements dropping, but here’s just a hint of what’s to come.

Before the open

• Bank of America (BAC) has seemingly lost the heart of Warren Buffett, who has been selling his shares of the stock en masse for months now. That’s not a vote of confidence for the company, though shareholders shouldn’t be too turned off—interest rate cuts and AI innovations bode well for the bank’s future, and last week’s earnings for fellow major banks point to stronger net interest income across the industry. Consensus: $0.77 EPS, $25.31 billion in revenue.
• Albertsons Companies (ACI) has kept shareholders on pins and needles as they await word on whether or not the company will be acquired by Kroger, a deal that was originally proposed two years ago now. But even if the merger falls through, Albertsons will remain a powerhouse in the grocery industry, and solid same store sales growth coupled with expanding margins mean that the business will be just fine. Consensus: $0.48 EPS, $18.47 billion in revenue.

After the close

• United Airlines (UAL) probably doesn’t seem like a winner, considering all the problems the airline industry has faced this quarter (see: massive IT outage, bankrupt competitors, etc). But United has weathered it all well, and considering how Delta wasn’t slowed down by the enormous toll CrowdStrike took on the industry, United probably won’t either. Analysts are bullish: All 12 covering the stock rate it a “buy.” Consensus: $3.07 EPS, $14.78 billion in revenue.