Breaking News
Get 40% Off 0
👀 Reveal Warren Buffett's stock picks that are beating the S&P 500 by +174.3% Get 40% Off

S&P 500 Earnings Yield Highest Since Mid-March ’23: Can it Sustain?

By Brian GilmartinStock MarketsOct 23, 2023 04:08AM ET
www.investing.com/analysis/sp-500-earnings-yield-highest-since-midmarch-23-can-it-last-200642953
S&P 500 Earnings Yield Highest Since Mid-March ’23: Can it Sustain?
By Brian Gilmartin   |  Oct 23, 2023 04:08AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
US500
+0.80%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
BA
-1.82%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
C
+0.20%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
INTC
+1.79%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
MSFT
+0.45%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
KO
-0.80%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Roughly 16% of the S&P 500’s market cap will report this coming week, with Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) (GOOG/GOOGL) on Tuesday, Meta (NASDAQ:META) on Wednesday and then Amazon (NASDAQ:AMZN) on Thursday, all releasing their September ’23 quarter end financial results after the close.

JP Morgan, Citigroup (NYSE:C), and Wells Fargo all had fairly solid Q3 ’23 earnings releases on Friday morning, October 13th, and all three stocks are trading below their opening highs from that morning. Wells Fargo has held up the best, but JP Morgan and Citi look sickly.

Worries over interest rates, a too-strong economy, and more fed funds rate increases, are keeping a lid on stock gains even after good earnings.

Can the mega-cap technology earnings reports change the trend?

S&P 500 Data

  • The forward four-quarter estimate (FFQE) fell to $238.95 this week from the week's prior $239.22;
  • The PE fell to 17.6x after this week’s 2.4% decline in the SP 500, versus the PE last week of 18x;
  • The S&P 500 earnings yield jumped to 5.66% as of the Friday, Oct. 20th close. This is the highest S&P 500 earnings yield since the week of March 17, ’23, or the middle of the Silicon Valley Bank collapse, when the EY also closed at 5.66%;
  • Per the Refinitiv data, just 86 S&P 500 companies have reported their Q3 ’23 financial results thus far, with the “upside surprise” for earnings being 6.9%, and the revenue “upside surprise” being +0.8%; The upside surprise or beat rates will mean more after this coming week’s results.
  • 158 companies are expected to report this coming week, per Refinitiv;

Summary

The negativity and sentiment have left the set-up for Q3 ’23 earnings, particularly the mega-cap tech companies, in a good position as even mild EPS and revenue beats might see a post-earnings pop in the stock prices, but the fact is that’s a slippery slope as well since what really matters is how the stocks (any stock) perform into year-end ’23.

Investors are now in the middle of what is typically the best seasonal period of historic returns for the S&P 500, i.e. the October, November, and December time frame.

There are other companies of interest reporting this coming week, including Coca-Cola (NYSE:KO), Boeing (NYSE:BA), IBM (NYSE:IBM), Merck (MRK), and Intel (NASDAQ:INTC).

MOAT Graph
MOAT Graph

Here’s the chart that seems to be getting the most attention, cut-and-pasted from @Heisenburg on X.

It’s a do-or-die moment for the S&P 500, and the mega-cap tech earnings reports could save (or sink) the uptrend.

***

Take everything here with substantial skepticism and a healthy dose of salt. The S&P 500 EPS data is sourced from IBES data by Refinitiv. This is all one person’s opinion and past performance is no guarantee of future results. The above is in no way expected to represent a recommendation or advice. Readers should gauge their own appetite for market volatility and adjust their portfolios accordingly. This information may or may not be updated and if updated, may not be done in a timely fashion.

S&P 500 Earnings Yield Highest Since Mid-March ’23: Can it Sustain?
 

Related Articles

S&P 500 Earnings Yield Highest Since Mid-March ’23: Can it Sustain?

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 investing.com profile, will be public on investing.com 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 Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
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?
 
Post
 
Replace the attached chart with a new chart ?
1000
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 Investing.com'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
or
Sign up with Email