🎁 💸 Warren Buffett's Top Picks Are Up +49.1%. Copy Them to Your Watchlist – For FreeCopy Portfolio

S&P 500 Earnings Estimates Going Forward Barely Showing Any Growth In 2019

Published 09/29/2019, 12:18 AM
Updated 07/09/2023, 06:31 AM
US500
-
AAPL
-
LNKD
-

The “forward 4-quarter estimate” next week (after the quarterly roll) will be $175.69, versus the $176.25 of two weeks ago. As readers can see, even looking out further than the typical earnings metrics, there is a natural degradation to the S&P 500 earnings data each week.

This will be the last week of the Q3 ’19-Q2 ’20 period. Thus next week, with the quarterly roll, we will be looking at Q4 ’19-Q3 ’20 estimates.

S&P 500 earnings data (by the numbers): compliments of IBES by Refinitiv

Forward data

  • Fwd 4-qtr est: $170.58 vs last week’s $171.14
  • FWD PE: 17.4x
  • FWD PEG: 15.7x
  • S&P 500 earnings yield: 5.76% vs last week’s 5.72%
  • Y-y growth of fwd est: +1.10% vs 1.22% last week
  • Trailing data

  • TTM 4-qtr est/ actual: $153.31 vs $164.44
  • TTM PE: 18x
  • TTM PEG: 4.5x
  • S&P 500 earnings yield: 5.55% vs last week’s 5.50%
  • Y-Y growth of TTM est: 3.82% vs last week’s 4.07%
  • From Chris Kimble, an excellent technician who puts his technical analysis work up on Twitter and LinkedIn (NYSE:LNKD) for all to see.

    This chart scares the crap out of me:

    SPX testing 20-year resistance

    Summary / conclusion: With just one trading day left in the 3rd quarter of 2019, the numbers (Q2 ’19 earnings and revenue) are already baked into the market and we now await 3rd quarter, 2019 results due to start on October 10th.

    The “forward 4-quarter’s estimate” is barely showing any growth over the 52 week estimate period prior (see last bullet point of “forward data”), which means Street analysts and strategists have really pulled in their growth expectations. Is it the China tariff headlines that are keeping the Street constrained? Apple’s (NASDAQ:AAPL) outsized influence on Technology (after the spinoff of the Communication Services sector, Apple is now 20% of the weight of the Technology sector and the Tech sector is still the largest sector within the S&P 500 at 20% of the market cap) thus Apple’s iPhone issues are keeping Tech expectations constrained.

    The Fed/FOMC has now cut rates twice in the last 6 weeks and the S&P 500 hasn’t really traded much above its 3,025-3,027 hghs from late July ’19, with the point being that the S&P 500 is now lower than when the Fed started cutting rates.

    Market breadth and the poor sentiment are allowing the bullish stance to be maintained, given the contrarian nature of sentiment. High yield credit still looks OK too.

    The impeachment inquiry is a new fly in the ointment. I was a kid in the 70’s and heard about Watergate every day. Ultimately I hope the inquiry doesn’t impact the U.S. consumer.

    Latest comments

    Loading next article…
    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.