Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

What A Difference A Day Makes: The Calendar Roll

Published 08/23/2016, 01:44 AM
Updated 07/09/2023, 06:31 AM

The S&P 500 Index was essentially flat today, down .06%; however, an investor's one year price only return will increase over three full percentage points from last Friday's close to today's close. For an investor invested in the S&P 500 Index, Friday's (8/19/2016) one year price only return equaled 7.28% and one day forward to Monday's close, the investor's one year return increases to 10.74%. The reason for this is the calendar rolling forward one day, weekends result in some nuances, and August of last year was a volatile month to the down side for the market and this is contributing to the magnitude of the change in return.
1 Year Price Change

S&P 500 Index 1-Year Total Return


This same impact is resulting in large spikes in the one year rolling return for energy as energy prices were in the upper $30 range versus today's $47.41. As time moves forward to year end, energy was falling into the mid $20/bbl area and if oil prices stay near current levels, the year over year price increase will be significant, nearly a doubling of the price of oil.
WTI & Brent Crude 1-Year Price Change
WTIC Daily Chart


The interesting dynamic will be the impact on year over year earnings for the S&P 500 Index. S&P Dow Jones Indices has reported that the fourth quarter of 2015 as reported (bottoms up) earnings per share for the S&P 500 Index equaled $18.70. Projected bottoms up per share earnings for the S&P 500 at 12/31/2016 equals $29.30. On a year over year basis, earnings growth will equal over 56%.
S&P 500 YoY EPS Growth

Some of the recent equity market strength is a result of this anticipated improvement in earnings growth for companies and it will be significant assuming it continues on its current path. As is often the case, the stock market follows earnings (flat earnings in 2015 and flat equity returns) and the YoY double digit S&P 500 return is moving towards the YoY 16.6% anticipated growth rate for bottom up earnings in Q3 2016. Not sure I would want to be a stock market bear at the moment.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.