IBES data by Refinitiv’s Earnings Scorecard came out early this Friday morning, 10/22/21, and from that report and one of the tables therein, the above spreadsheet was created to track S&P 500 'expected' EPS and revenue growth rates over long periods of time.
Note the weakening in 2H ’22 for S&P 500 EPS and revenue. Late 2022 expected growth rates looked to have peaked the week of Sept. 24, 2021.
This coming week is the big week for S&P 500 market cap with Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) reporting.
Bespoke noted in Q2 ’21 that it’s unusual for the “Big 5” to all report in the same week, and now it’s happened two quarters in a row.
At the end of October we’ll update all these spreadsheets.
2021 expected growth rates:
As readers can see from the above chronology for both Q3 and Q4 ’21, the expected growth rates for the S&P 500 continue to push higher.
Summary / conclusion: It’s clear that the sell-side analysts are starting to consider a Fed taper and its potential impact on US stocks and the S&P 500. It’s also important to think about the fact that—given the inflation data—the Street might be expecting an earlier fed funds rate hike for late 2022 than was thought otherwise.
For some perspective, the Street completely missed the EPS and revenue upside for the S&P 500 for 2021, at least through the first three quarters. The sell-side was starting to curtail their estimates in late 2020 for 2021 only to be caught completely off-guard underestimating the actual strength.
Next week is critical: 22% of the S&P 500’s market cap reports with the Big 5, and we'll be watching revisions.