Breaking News
Investing Pro 0
🙌 It's Here: the Only Stock Screener You'll Ever Need Get Started

Forward S&P Estimates Still Deteriorating

By Brian GilmartinStock MarketsNov 13, 2022 11:50PM ET
Forward S&P Estimates Still Deteriorating
By Brian Gilmartin   |  Nov 13, 2022 11:50PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio

Impressive rally in both the US stock, bond and international equity markets last week. However (quickly) the S&P 500 as of 11/11/22, was down -15.13% YTD, while the Barclay’s AGG was down -13.85%, leaving the 60% / 40% balanced portfolio down -14.62%, a full 5.5% improvement from the -20.11% return as of 9/30/22.

S&P 500 data

  • The forward 4-quarter estimate (FFQE) fell to $225.20 from last week’s $226.72 or a sequential decline of -0.67%, the smallest sequential decline of the last 3 weeks;
  • The forward PE is now 17.7x after the near 5% rally in the SP 500;
  • The S&P 500 earnings yield fell to 5.64% from last week’s 6.01%;
  • The Q3 2022 bottom up estimate fell to $55.90 vs last week’s $55.97, still above $55.


S&P 500 EPS Rates Of Change
S&P 500 EPS Rates Of Change

Expand this spreadsheet and then examine the three years from 2022 – 2024: the 2023 EPS estimate is degrading faster than 2022, although the 2022 “52-week rate of change” went negative this week for the first time. 

Sector updates: 2022 and 2023

S&P 500 EPS Expected Growth Rates By Sector
S&P 500 EPS Expected Growth Rates By Sector

Four sectors are expected to show faster EPS growth rates in 2023 (vs 2022) as the forecasts stand today: Consumer Discretionary, Consumer StaplesFinancials and Utilities.

Take that with a dose of skepticism.


Q3 2022 S&P 500 earnings season ends unofficially this week with Walmart's (NYSE:WMT) report on Tuesday morning. Q4 2022 S&P 500 EPS estimates have been coming down but that’s not a surprise if you’ve been reading this blog, since 2023 has been weakening too.

The relationship between changes in the S&P 500 forward EPS estimates and the 10-year Treasury yield make for an interesting discussion. There is no question, a less restrictive Fed policy will help take the edge off the the bond market, but it will also help the S&P 500 as well. Four separate 75 bp increases in the fed funds rate in 2022, and yet the S&P 500’s worst YTD decline in terms of end of week calculations, was on 9/30/22 when the S&P 500 was down -23.93 YTD.

If you had asked me in January 2022 what would be the YTD return in the S&P 500 after four 75 bp increases in the fed funds rate, I would have speculated or guessed that it would have been a lot worse than down 23% – 24% YTD.

Throw in the incredible dollar strength this year and the S&P 500 and the stock market in general has absorbed quite a beating in 2022 and yet has held up pretty well (in my opinion).

CNBC is loaded every day with various predictions about many different stocks, and asset classes and it’s almost a comedy of errors. Evaluate “risk vs. reward” and be patient. International and non-US asset classes given the 10 and 15-year annualized returns look particularly compelling. Clients are still long the Oakmark International Fund Investor Class and EMXC or emerging markets ex-China ETF. Using the American Funds The Growth Fund Of America® Class A as a growth-stock proxy, the fund was up 5% this past week.

On a personal note, my 40th reunion from undergrad was held this past weekend, and it was in 1980 – during a Money & Banking class that was taught by an official from the Cincinnati Federal Reserve – that the fed funds rate hit 20% under Paul Volcker and the 30-year Treasury traded to 15%. Watching the 10-year Treasury yield hit 53 basis points in late July, 2020, just a few weeks before the Jackson Hole economic conference started, was really like watching your life come full circle.

The general opinion is that the S&P 500 could be in for another leg lower as the S&P 500 earnings continue to deteriorate. No question the forward estimates are under pressure. I’m not going to argue with that notion or assumption, but only say that an enormous amount of damage has been done TYD from PE compression, so the switch can flip if the bond market pressure eases in terms of consistently higher yields, and there could be seen a longer period of PE expansion, like the early 1990’s.

It’s going to be tight (as they say) whether lower forward EPS estimates can be offset by steadier long-term yields.

Anyway, take everything here with a grain of salt and substantial skepticism. It’s one opinion. Past performance is no guarantee of future results, and nothing here today may be updated or brought current. Capital markets can change quickly, for better and worse.

Forward S&P Estimates Still Deteriorating

Related Articles

Forward S&P Estimates Still Deteriorating

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your profile, will be public on and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email