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– This has not happened since the financial crisis



The dynamic duo of DNB Markets, Morten Jensen and Paul Harper, have traditionally collected data for the results season on the Oslo Stock Exchange, after all major companies have achieved first quarter results. And the results were not much to shout:

– Very bad, Jensen summarizes.

The real estate agency measures the results of the company in comparison with what analysts had in advance. The listed companies are disappointing, both in terms of operating profit and earnings per share, and the turnover is also below par.

Double disappointment

The special thing this time is that the disappointing results come after the fourth quarter, which were also disappointing compared to what analysts had expected. So there have been two bad quarters in a row.

– It hasn't happened since the financial crisis, says Jensen.

But despite the weaker results than expected, this did not result in price drops on the reporting day. The companies outperformed the stock market on the day they reported.

– Investors did not believe in analyst estimates?

– It's a possibility, says Jensen.

Other explanations can be:

  • The stock market fell sharply in the fourth quarter, but rose sharply in the first quarter. The good underlying mood in markets could not be broken by the fact that the results were not satisfactory.
  • Fear that management would fall short of their expectations. It didn't happen because the market was relieved, despite the poor results.

– It may explain the lack of negative price responses, says Harper.

Trade war decided

Since the end of the quarter there has been more confusion on the market, but the Oslo Stock Exchange has been solid in the plus for the entire year, with an increase of around 10 percent. Threats to the trade war between the US and China and increased rates form the background.

– There is uncertainty associated with a possible trade war. If there is no solution, there is not much upside potential in the market. If there is a solution, it might be the case for a moderate increase during the year, says Harper.

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