SP 500 Weekly Earnings Update: Housing, Retail, and a Few Tech Companies Report This Week

Per Thomson Reuters, the forward 4-quarter earnings estimate rose this week to $122.03, from last week’s $122.01.

The P.E ratio on the forward estimate is 17.3(x)

The PEG ratio is still negative.

The SP 500 earnings yield fell to 5.78% from last week’s 5.83% on the SP 500’s +0.76% increase this week.

For the 8th straight week, the year-over-year (y/y) growth rate of the forward estimate was negative at -0.84%, but the y/y growth rate has yet to decline below 1%, so the y/y growth rate seems remarkably stable at between 0% and -1%.

Analysis / conclusion: At this time of the quarter, anything noteworthy around SP 500 earnings has already been said. 499 of the 500 SP 500 companies have reported their 3/31/15 quarter. Actual SP 500 earnings growth for Q1 ’15, both Ex-Energy and Ex-Apple is pretty robust once again at +8% – 9%, which is pretty healthy growth.

Two companies that have reported their May ’15 quarter end this past week, Oracle and FedEx Corp, were not received well. Downward revisions for ORCL’s forward estimates were much greater than FDX. (long both stocks in small quantities, looking to own both again at lower prices.) Currency played a big part in ORCL’s negative revisions.

This week, Lennar (LEN), Bed Bath & Beyond (BBBY), Micron Technology (MU), and Nike (NKE), all report their May ’15 quarters. Accenture does as well, which along with ORCL, could give us a look into IBM’s Q2 ’15. (Long LEN, NKE, ORCL, and IBM).

For Q2 ’15, only two sectors have seen their expected sector earnings growth improve from April 1: Telco has improved to +5.7%, from +3.4%, and Energy has improved slightly from -64.6% to -63.4%. A 63% decline is still pretty ugly, but the revisions have not gotten worse over the last 80 days.

The downward revisions for Q2 ’15, in terms of sector earnings growth remain normal (as far as I can tell).

The Healthcare sector is still the fastest growing sector in terms of earnings growth with Q1 ’15 earnings growth, at +17.7%, followed closely by Financials at +16.1%.

One final thought: Yellen, in my opinion, was remarkably “dovish” this week, and yet the 10-year didn’t rally as much as I would have expected given the tenor of her comments around the US economy.

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