SP 500 Weekly Earnings Update: Q2 ’19 Off to Better Start than Q1 ’19

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The above graph is featured every week (and updated weekly) on the front page of “This Week in Earnings”, IBES by Refinitiv’s definitive weekly earnings report.

Now compare that July 19th, 2019, graph to this one from, April 18th, 2019:

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The slope of the acceleration caught my eye, but the fact is with the typical “upside surprise” this quarter of 3% – 5%, Q2 ’19 earnings will likely come in around 2% – 3% y/y growth at least and possibly a little more.

What I’m really keeping an eye on are revisions for Q4 ’19 – that’s a topic for another post though.

SP 500 Earnings data (by the numbers): 

  • Fwd 4-qtr est: $174.34, vs $174.68 from last week
  • PE ratio: 17x
  • PEG ratio: 2.54x
  • SP 500 earnings yield: +5.86% vs 5.80%
  • Y/y growth of the fwd est: +3.53% vs +3.82% from last week

(Forward estimate source: IBES by Refinitiv)

Summary / conclusion: Q2 ’19 earnings will likely be better than Q1 ’19 earnings for the SP 500, but not by enough for readers to see a whopping difference in growth rates. I’m still surprised how far the growth rate fell for the first half of 2019, but the 2018 comp’s were tough given tax reform, however, I thought we’d do 10% this year at least for the SP 500 in terms of organic earnings growth, and we may barely get to 3% as it stands right now. Remember, Financials will be the first sector to start and finish reporting with no other sector coming close, thus by the end of this week. 46 Financial’s of the 68 in the index will have reported Q2 ’19 earnings.

Maybe that’s why the earnings growth turned sharply in the above graph for Q2 ’19.

The Q2 ’19 earnings season will be pretty ordinary is my guess.

It’s still all about the Fed and 25 or 50 bp’s on July 31.

Thanks for reading.






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