(Source: IBES by Refinitiv)
On December 1, readers were told to keep an eye on Consumer Discretionary and Real Estate.
It’s not negative revisions that worry us – it’s expected that analyst estimates erode as we get closer to a quarter (Ed Yardeni has written about this for years) – it’s positive revisions to sectors even as the rest of the SP 500 typically sees downward revisions, that provide a positive tell for investors.
Financials – per the above table – have been stable now since October 1 ’19 (i.e. the expected 2020 growth rate has been stable) which is a positive.
Consumer Discretionary, Real Estate and Financials – the revisions portend positively for each of the these sectors.
Summary / conclusion: As a whole, the SP 500 looks pretty good heading into Q4 ’19 earnings in a week or so. “Degradation” or erosion hasnt been too bad since October 1 of 2019. My guess is Q4 ’19 earnings and revenue will come in a little ‘hot” (good upside) and 2020 guidance will be tempered. Like overall stock market sentiment, no one wants to be bullish.
2019 was a good year.
This is the first official blog post of 2020 and I thought readers deserved an update of 2020 sector estimates.
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