A longer Look at SP 500 Earnings

  • 2019 est: +10%
  • 2018 est: +12%
  • 2017 est: +11%
  • 2016: +1%
  • 2015: -1%
  • 2014: +8%
  • 2013: +6%
  • 2012 +6%
  • 2011:+15%
  • 2010 +40%

This blog may be out with a few sector updates over the weekend (or maybe not) but tonight’s post was simply an attempt to show readers the longer-term annual growth rates for the SP 500.

2017 is looking to be the best year of earnings growth for the SP 500 since 2011, a year where the SP 500 was down 20% as early October ’11, but managed to rally back in three months for a 1% gain on the year.

Also, I suspect the Street doesn’t have any kind of tax reform in the full-year 2017 numbers yet.

Looking at 2015 and 2016, that “earnings recession” was all Energy-sector related. Ex-Energy my guess is that SP 500 earnings grew 5% – 7% in the last two years.

Energy as a sector continues to look horrible, as numerous points of good news, i.e. large crude and distillates draws, OPEC reiterating production cuts, has meant nothing for the sector in terms of upside action. Any time a sector doesn’t respond to patently good fundamental news, its time to sell.

The remaining Energy (XLE) positions were sold this week. Clients Energy overweight worked against clients in 2017 and it doesn’t look to be getting better. (This post may be your Jim Cramer, “buy, buy, buy” signal for the Energy sector.)

Brazil was sold this week on the Temer news. The EWZ (Brazil ETF) was sold at a nice gain.

Still remain long the EEM and the VWO.

Thanks for reading.


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