Open or double-click on the above spreadsheet.
Now here is this post from January 8th, 2017 this year.
This pattern of negative revisions continues to persist in the first quarter of the past few years, despite the fact that this year, the SP 500 was up 1.5% – 2% in January ’17, led by Basic Materials and Technology.
Last year in Q1 ’16, commodity prices were plummeting, and high-yield spreads were widening, and so it made sense that positive revisions were less than negative revisions.
In Q1 ’15: Crude oil was collapsing and the US dollar had its record run from Oct ’14 through March ’15.
In Q1 ’14: Russia invaded Ukraine and Venezuela devalued resulting in much market angst.
The point is that the negative-to-positive revision ratio given the “macro” in ’17, you would have thought would have come to an end.
Not so much.
Energy was one of the worst performing sectors in January ’17, down almost 5%. The one flaw to the revision ratio is that it isn’t broken down by sector – all that can be seen is the “index level” revisions.
So how does this data influence the investment process ? It may be why the SP 500 hasn’t broken out yet above 2,300, despite the economic data today.
Ultimately analysts are still cautious and not yet raging bullish. Have to think that’s a good thing.
The SP 500 Weekly Earnings Update may not be out till Sunday or Monday – traveling this weekend to see a client.
Thanks for reading.