Weekly review 2 May 2022: What does the current earnings season tell us about Q1 economic development?


The Q1 earnings season is underway. What kind of figures have companies reported in the USA and Europe? What is the situation like on the EU’s Russian sanctions front? What is happening with China’s Covid policies? 

What is the general market outlook right now?

Last week, the markets’ focus was still on Ukraine, the central banks and inflation. A new theme on the markets in the next few weeks will be the Q1 earnings season, which began last week.

Market volatility has strengthened in recent weeks. There is no single reason behind this, but most likely key background factors are the tightening of central bank policy and rising interest rates, which have resulted in indirect impacts also on the equity markets.

The dollar has clearly appreciated against the euro, which has kept US market development level with other markets. In contrast, the Japanese yen has depreciated significantly.

What is the latest on Ukraine and the sanctions?

The sanctions against Russia are still key factors when it comes to Europe’s economic growth. Last week, Russia cut off gas deliveries to Bulgaria and Poland because the countries refused to pay for gas in roubles as Russia insisted. In the short term, shutting off the gas pipelines will probably not cause major difficulties, as the approaching summer will reduce the need for heating. In the longer term, Europe is concerned about more extensive halting of gas deliveries. Europe’s energy ministers held crisis talks on the topic on 2 May.

Measures to restrict oil imports, which have long been in the making, are now being prepared by the European Commission. Based on speculations, the measures might include setting a price ceiling for Russian oil, which would mean that no country could pay Russia more than a certain amount for its oil. The objective of the restrictions is to reduce the financing that Russia receives from oil for its war. The measure would, however, require the participation of the world’s other major oil importers; if only the EU is involved, Russia could sell its oil to other buyers at the normal price.

The earnings season is underway. What sort of figures have been reported so far?

The first earnings season of the year has so far slightly exceeded expectations. At this point, around half of US companies have released their earnings, which have been good. Companies’ turnovers have grown by an average of 11%, while earnings have grown 0.5%. Individual tech companies, such as Netflix and Alphabet (Google) have reported lower-than-expected figures, as has Amazon, whose earnings were significantly worse than expected. 

In Europe, ca. 40% of companies have so far reported their earnings. Turnover-wise, the figures are very much on a par with the USA, at some 12%, but for earnings growth, the figure is -26% for those that have so far reported their earnings. The clearly negative figure is largely due to the fact that financial sector companies and banks, which are typically among the fastest reporters, have reported weakened earnings. The figure is expected to level out as the earnings season progresses.

Are changes taking place in central banks’ policies?

On Wednesday, the Fed will hold an interest rate meeting where it is expected to raise the key interest rate by two basis points, i.e. 0.5 percentage points. The markets are already pricing in a 0.5% interest rate hike. We also expect to hear information on the upcoming balance sheet shrinking measures.

What is happening in China’s economy?

One of the most talked about issues on the market in recent weeks has been China’s stalled economy. The underlying factors are China’s tight Covid policy and strict lockdown measures, due to which even low numbers of cases have led to entire ports and factories being closed. Global logistics chains are suffering from the lockdowns, and there is a global shortage of components and semiconductors, among other things. As a result of the restrictions, also people’s consumption opportunities have been limited.






Mon 2.5.


Retail sales (y/y)



Mon 2.5.

Euro zone

Business confidence



Tue 3.5.

Euro zone

Producer prices (y/y)


31.4 %

Tue 3.5.


Factory orders (m/m)


-0.5 %

Wed 4.5.

Euro zone

Retail sales (y/y)


5.0 %


Nothing presented here is or should be taken as an investment recommendation or solicitation to subscribe for, buy or sell securities. When making investment decisions, the investor must carefully familiarise themselves with the information given on the financial instruments and understand the related risks. The investor must base their decision on their own assessment, goals and financial situation. Risk is always inherent in investment activities. The value of the investment instruments may increase or decrease. The past performance of investment instruments is no guarantee of future performance.

Show all releases and news