Changes in Q3 ’21 Expected Revenue Growth Rates for the SP 500

There are 11 sectors in the SP 500.

Readers need to see how the expected Q3 ’21 sector revenue growth rates have changed since mid-August ’21 or the unofficial end of Q2 ’21 earnings season:

  • Consumer Discretionary: On 10/1, 10.6% y.y revenue growth is expected, versus 10.4% on 8/13/21;
  • Consumer Staples: On 10/1, 8.3% y.y revenue growth is expected, 10.4% on 8/13/21;
  • Energy: on 10/1, 57.8% y.y revenue growth is expected, vs 57.9% on 8/13/21;
  • Financial: on 10/1, -0.8% y.y revenue growth is expected vs -1.7% on 8/13/21;
  • Health Care: on 10/1, 11.1% y.y revenue growth is expected vs 10.7% on 8/13/21;
  • Industrials: on 10/1, 17.8% y.y revenue growth is expected vs 19.2% on 8/13/21;
  • Basic Materials: on 10/1, 28.4% y.y revenue growth expected vs 28.7% on 8/13/21;
  • Real Estate: on 10/1, 13.1% y.y revenue growth expected, vs 12.8% on 8/13/21;
  • Technology: on 10/1, 18.7% y.y revenue growth expected, 18.1% on 8/13/21;
  • Communication Services: on 10/1, 17.3% y.y revenue growth expected, vs 17.5% on 8/13/21;
  • Utilities: on 10/1, 5.2% y.y revenue growth expected, vs 6.7% on 8/13/21;
  • SP 500: on 10/1, 14.1% y/y revenue growth expected, vs 13.9% as of 8/13/21;

Sectors ranked from strongest to weakest expected Q3 ’21 revenue growth:

  • Energy: 57.8%
  • Basic Mat: 28.4%
  • Technology: 18.7%
  • Industrials: 17.8%
  • Comm Services: 17.3%
  • Real Estate: 13.1%
  • Health Care: 11.1%
  • Cons Disc: 10.6%
  • Cons Staples: 10.6%
  • Utilities: 5.2%
  • Financials: -0.8%
  • SP 500: 14.1%

Sectors with the biggest upward revisions since August 13 ’21 for Q3 ’21 revenue:

  • Technology saw a 60 bp’s increase on an expected 18.7% growth rate;
  • Health Care saw a 40 bp increase on an expected 11.1% growth rate;

Sectors with the biggest downward revisions since August ’13 ’21 for Q3 ’21 revenue:

  • Consumer Staples saw a 210 bp decrease since 8/13/21 probably due to the stronger dollar;
  • Industrials saw a 140 bp decrease since 8/13/21;
  • Utilities saw a 150 bo decrease on a mid single digit growth rate;

Commentary: Tesla’s announcement over the weekend of stronger-than-expected Q3 ’21 car deliveries will likely help the Consumer Discretionary sector next week in terms of possible revisions, although Tesla’s earnings weight is much smaller than it’s market cap weight in the SP 500.

The dollar’s influence is bigger than readers might suspect on the SP 500 since 40% – 45% of the entire benchmark’s revenue is non-US.

Summary / conclusion: This article was originally posted to the blog on Saturday, October 2, 2021, but wasn’t picked up by Seeking Alpha, so it’s been amended to be included in Seeking Alpha’s published articles.

Per Bespoke’s research today, the SP 500 has now reached “extremely oversold” levels, worse than the oversold extreme seen in late October of 2020.

While today might not have been the exact bottom, you’d have to think “extremely oversold” is within a 9-iron of a longer-term tradeable bounce.

So far – since mid-August – anyway, the lack of revenue revisions could bode well for Q3 ’21 earnings.

Financials will report first next week, as they always do: JP Morgan, Bank of America, Citigroup, and Wells Fargo all report next Wednesday and Thursday of next week. Morgan Stanley and Schwab are in there too, although I don’t see Goldman on Briefing.com’s list of next week’s reports.

Thanks for reading.

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