"Given the lack of economic visibility, it is premature to provide an updated outlook for the full year." These are the words of Delta Airlines CEO Ed Bastian, as quoted in a statement issued by the airline. This is the kind of formula to to be expected in the coming weeks, during the Q1 earnings season.

A season that "officially" begins this Friday, with the results of several major US banks (JPMorgan, Wells Fargo et Morgan Stanley). As the macroeconomic environment looks set to deteriorate, investors will be paying close attention to the messages delivered by companies. Over the past five years, the global economy has suffered several shocks - the Covid pandemic, the war in Ukraine, inflation - but investors have always been able to hold on to the "micro". Thus, corporate results have often helped to reassure the markets.

However, as Delta Airlines did on Wednesday, many companies are likely to withdraw their forecasts for the current year, given the high degree of uncertainty. Indeed, the trade war launched by Donald Trump has led economists to reduce their growth estimates. And even though the American president has decided on a 90-day pause, there are still 10% universal tariffs - the "baseline" - and 145% tariffs on China. Not to mention the consequences of the uncertainty created, which has already dented consumer and business confidence. And this is translating into a pause in capex, M&A activity and IPOs.

So even though a majority of reciprocal tariffs are suspended or withdrawn, corporate results are likely to be affected. For the time being, analysts have begun to reduce their earnings forecasts, although to an extent comparable to that observed historically. This is shown by data compiled by Factset. Over the past 20 years, analysts have reduced their expectations by an average of 4.2% over the course of a quarter.

Source: Factset

For the Q1 2025, expectations have also been reduced by 4.2% (+7% to date vs. +11.7% at the start of the quarter). However, for the full-year, analysts are still expecting 11% EPS growth, which is more or less in line with expectations for a "normal" year.

Yet, MarketScreener expects the opposite. Q1 should be another solid one. Banks are expected to partly offset lower revenues from investment banking activities by trading activities, which are benefiting from market volatility. Other sectors, notably consumer goods, should benefit from households bringing forward certain purchases, out of a fear of tariffs. Overall, we therefore expect results to meet expectations. However, we expect many companies to withdraw their forecasts for the rest of the year.