SP 500 Earnings Update: SP 500 Still Struggling with 3,000 Level

Big numbers tend to be resistance for the key benchmark: back in 2014, the SP 500 traded through 2,000 and then the oil collapse started in Q4 ’14 and the benchmark traded back through 2,000 on the downside and really didn’t trade back and remain above 2,000 until Q1 ’16.

Then again in the late 1990’s 1,000 fell like a hot knife through butter.

Maybe it’s just a number.

SP 500 Earnings data (by the numbers): Source: IBES by Refinitiv

  • Fwd 4-qtr est: $174.75 vs last week’s $175.11
  • PE ratio: 17x
  • PEG ratio: 23x
  • SP earnings yield: 5.85% vs last week’s 5.90%
  • Y/y growth of fwd est: +0.73% vs +0.89%
  • TTM est: $162.65 vs last week’s $162.57
  • TTM PE ratio: 18x
  • TTM PEG ratio: 2x
  • SP 500 earnings yield: 5.45% vs 5.47%
  • Y/y growth using TTM est: 7.44% vs 7.71% last week

With the next two weeks, the real flood of SP 500 earnings will hit with 131 SP 500 companies reporting next week, per Refinitiv, on top of the 73 already reported. Thus, 40% of the SP 500 will have released quarterly results by next Friday.

Microsoft and Amazon report this week, as does Visa. Apple doesn’t report until October 30th.

Summary / conclusion: Writing the SP 500 earnings update this Saturday morning, October 19th, 2019, while watching the Brexit vote in the UK Parliament, (which was delayed once again to October 31) we are reminded once again of the glacial pace at which politics can move, which can be a good thing since it prevents rapid changes in economic conditions. still with Brexit as with China trade, the damage has been done so to speak as Corporate CEO’s have to grapple with the uncertainty of what the rules look like (or will look like) once there is a resolution to both issues.

Even with Friday’s drubbing the SP 500 finished the week higher by 0.55%.

Corporate high yield debt ETF’s like HYG, JNK, SHYG continue to be bid decently, as all three ETF’s were higher on the week, between +0.28% and +0.37%.

BlackRock’s Rick Reider does one of the best monthly economic and fixed-income updates that I’ve seen over the years and while Rick and slide show give evidence that job growth is slowing, probably due to manufacturing slowing, a recession doesn’t appear to be on the horizon.

More to come this weekend.

Thanks for reading.





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