Get 40% Off
🚀 Our AI Picked 6 Stocks that Jumped +25% in Q1. Which Picks Will Soar in Q2?Unlock full list

S&P 500 Earnings Firming Up but Index Fails to Close Above July ’23 High

Published 12/11/2023, 01:37 AM
Updated 07/09/2023, 06:31 AM

There’s nothing wrong with the trends in S&P 500 earnings data, at least what’s tracked weekly at Refinitiv since the numbers continue to firm.

Unfortunately, the S&P 500 couldn’t close above its July 23 ’23 high of 4,607.07, closing this week at 4,604.37.

  • The forward 4-quarter estimate fell $0.15 this week to $236.26 from $236.41;
  • The PE ratio ended the week at 19.5x;
  • The S&P 500 ended the week at 5.13%, still at the lower end of the preferred range, meaning the S&P 500 still looks rich or fully valued;
  • This coming week we get quarterly earnings from Oracle (NYSE:ORCL) Monday night, December 11th, Adobe (NASDAQ:ADBE) reports Wednesday, December 13th after the close, and then Costco (NASDAQ:COST) and Lennar (NYSE:LEN), on Thursday, December 14th, after the close.


S&P 500 Calendar EPS Rate Of Change

This Excel table shows the full-year 2023, 2024, and 2025 S&P 500 EPS estimates. The expected growth rates are +2%, +11% and +12% respectively for 2023 – 2025.

Even with pressure on Q4 ’23 bottom-up EPS, calendar 2024 has yet to change very much, and companies are starting to leak out their calendar ’24 guidance.

Let’s put it another way, if there is a problem in 2024, I don’t think it will be earnings-related, but still bond-market-related or interest-rate driven.

Maybe the whole earnings-related discussions are pointless since the tech sector EPS growth in 2023 is just 7%, and yet the sector is up 49.97% YTD as of 12/1/23.

In 2019, with Jay Powell cutting the fed funds rate, the S&P 500 rose roughly 30% on zero S&P 500 EPS growth (talk about PE expansion).

Looking at expected S&P 500 EPS sector growth rates for 2024, the tech sector’s EPS growth is expected to rise from 7% in ’23 to +15.8% as of 12/8/23.


Oracle’s conference call will be interesting after the bell on Monday, December 14th. This blog will have an earnings preview on ORCL over the weekend.

Margins have been under pressure thanks to the Cerner (NASDAQ:CERN) acquisition. Guidance tanked the stock after the August ’23 quarter reported in September.

With worries about Walmart (NYSE:WMT) and “deflation”, Costco’s quarter on Thursday night will get some interest. Costco is a juggernaut. They execute regardless of the macro. What a brand, but it’s always fully-valued.

Recent jobless claims and this morning’s November jobs report show the US economy still slowly decelerating, but not enough to send S&P 500 EPS off a cliff (at least not yet).

With Oracle and Adobe and Lennar and Costco this week, and then Nike (NYSE:NKE) and Fedex and Accenture (NYSE:ACN) and Micron (NASDAQ:MU) in coming weeks, readers will get a nice cross-section of the US economy that is driving this market.

Don’t forget the November CPI and PPI due Tuesday and Wednesday next week. The drop in crude oil has been very helpful for the overall indices. Gasoline – at least in Illinois the last week – is $3.16 a gallon (at Costco), the lowest since Christmas week of 2022, when it was $3.00 to $3.05.

Technically speaking, the S&P 500 needs to trade above that July ’23 high of 4,606.07 and then run towards the all-time high at 4,795 – 4,800 to support the bull’s case. The S&P 500 price targets for 2024 seem bearish today.


Take all this with substantial skepticism, and a considerable grain of salt. None of this is advice or recommendation. Past performance is no guarantee of future results, and investing can involve the loss of principal. Capital markets can change quickly for both the good and the bad. Assess your own comfort with your portfolio volatility and adjust accordingly.

Latest comments

never mind... markets are on a high and the bull Run is here to stay
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.