This pattern was noted a couple of times in the last week on Twitter so I thought Callum Thomas’s chart should be highlighted for readers:
The quarter is half over as of Friday. The final 6 weeks of the year are upon us.Let’s see if we get the year-end rally.
Weekly Earnings Update: IBES by Refinitiv
- Fwd 4-qtr est: $171.79
- PE ratio: 15.9x
- PEG ratio: 0.77x
- SP 500 earnings yield: 6.28% – 7th straight week the SP 500 earnings yield is over 6%
- Year-over-year growth of fwd est: +20.72%, but the 7th straight week the forward estimate has slowed.
Summary / conclusion: this blog will start tracking a new metric tomorrow, the “trailing 4-quarter earnings” vs the “forward 4-quarter earnings” metric above, which will get readers a more accurate look at the “year-over-year growth rate of the forward estimate”. Readers saw it previously with the calendar year estimates but we also had now way of tracking what was happening in between the calendar year estimates. Like tracking an individual stock, and let’s say its September, do you look at that year’s P.E or the next calendar years, PE. Now we will have both.
What is strange with all the worries about SP 500 earnings for 2019 is that the calendar year EPS estimate of $177 – $178 has been calling for 10% growth for most of 2018, but has just recently slowed to 9%.
Readers of his blog have known for a while 2019 would see 9% – 10% EPS growth from the SP 500.
This was a good post I thought from Friday night, at least it gives more detail on the expected earnings for 22% of the SP 500’s market cap, while this post might have been too bearish.
Thanks for reading.