SP 500 “Earnings Yield” Jumps to 6.1% / Forward Growth Rate to 20%

Given the market action this week, i wondered if Street analysts would pull in their bullishness on forward SP 500 estimates and that absolutely didn’t happen.

Here is the Thomson Reuters data by the numbers:

  • Fwd 4-qtr est: $157.28
  • P.E ratio: 16.4x
  • PEG ratio: 0.84x
  • SP 500 earnings yield: 6.1% vs last week’s 5.62%
  • Year-over-year growth of fwd estimate: +19.6%, probably the highest since the late 1990’s when Tech was growing 35% – 40% per quarter

The SP 500 earnings yield has jumped because the forward estimate (numerator) rose this week, while the SP 500 (denominator) fell.

The SP 500 earnings yield is now at its highest print since the China devaluation and crude oil correction ended in February ’16.

The year-over-year growth rate of the forward estimate is now the highest since – what i think is – the late 1990’s although I didnt start following the data until the early 2000’s.

This SP 500 earnings data is very, very strong, there is little doubt about it.

I’ve never seen this kind of consistent upward revisions to weekly data like this and I’ve been tracking the data for 15 – 18 years.

The fly in the ointment this year will be how fast interest rates rise but given earnings data, eventually stock prices will push higher.

Thanks for reading.

 

 

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