Here is a thorough update by Greg Harrison and David Aurelio of Thomson Reuters. With roughly 490 of the SP 500 having reported Q2 ’15 earnings as of 8/31/15, the following is how the numbers fall out.
See the analysis and conclusions below.
S&P 500 2Q15 year-over-year blended earnings growth rates
| Sector | 2Q15 |
| Consumer Discretionary | 12.7% |
| Consumer Staples | -0.2% |
| Energy | -56.2% |
| Financials | 18.5% |
| Health Care | 11.7% |
| Industrials | -1.1% |
| Materials | 8.3% |
| Technology | 6.5% |
| Telecom Services | 9.3% |
| Utilities | 4.3% |
| S&P 500 | 1.4% |
| S&P 500 Ex-Energy | 8.9% |
| S&P 500 Ex-AAPL | 0.2% |
| S&P 500 Ex-Citi | -0.3% |
| S&P 500 Ex-BAC | 0.4% |
| S&P 500 Ex-(Citi, BAC) | -1.3% |
| S&P 500 Ex-(Energy, AAPL) | 7.8% |
| S&P 500 Ex-(Energy, AAPL, Citi, BAC) | 4.7% |
| S&P 500 Ex-(Energy, AAPL, Citi) | 5.9% |
| S&P 500 Ex-(Energy, AAPL, BAC) | 6.7% |
| S&P 500 Ex- (Energy, Citi, BAC) | 6.0% |
| S&P 500 Ex- (Energy, Citi) | 7.1% |
| S&P 500 Ex- (Energy, BAC) | 7.9% |
| S&P 500 Ex- (AAPL, Citi, BAC) | -2.6% |
| S&P 500 Ex- (AAPL, Citi) | -1.5% |
| S&P 500 Ex- (AAPL, BAC) | -0.9% |
Analysis / conclusion: This is a thorough breakdown and dissection of SP 500 for Q2 ’15 as provided by David Aurelio of Thomson Reuters.
1.) Since the July 31, SP 500 earnings update found here, ex-Energy and Apple, SP 500 earnings have actually accelerated a little;
2.) Ex-Energy, Apple, and the two big banks, Q2 ’15 are still up close to 5% at +4.7%;
3.) As we await the September earnings for those companies with August quarter end, like Oracle, Fed-Ex, Accenture, etc. Q2 ’15 earnings looks like they decelerated just slightly from Q1 ’15’s, +11% Ex-Energy and Apple.
4.) The comp’s for the Energy sector and the US dollar start to get easier as we move into year-end 2015.
Whatever the market’s issues at this point, it really isn’t core SP 500 earnings growth. With Technology and Financials being the largest market cap weights in the SP 500, only Apple (I would think) would be greatly at risk for earnings drag, and given its valuation, it would likely only tread water at worst. Apple has taken a considerable pounding already since its earnings report in late July ’15.
My own conclusion: the risk of an earnings recession remains quite low.
However I don’t know what causes this current market correction to stop either. It certainly isn’t “earnings fear” driven.
As the old REO Speedwagon song went, “Riding The Storm out” is the way through this correction.
Long FDX (small position), Oracle, Apple, BAC,