By the time most readers might get to reading this, the Fed’s September meeting minutes will be released (due in 75 minutes) and Alcoa will have released its q3 ’14 financial results, due after the bell tonight.<\/p>\n
The market sentiment seems to think that q3 ’14 will be quite bad thanks to the US dollar and a weak European economy.<\/p>\n
Industrial<\/strong><\/em> numbers have been taken down probably thanks as much to Europe as currency.\u00a0However the Thomson Reuters data has shown little overall change in the expected q3 ’14\u00a0Industrial sector growth since Jan 1 ’14. At that time Industrial’s were expected to grow +9.2% and as of Friday, 10\/3, that expected growth was +8.3%,\u00a0i.e. not even a full\u00a0100 bp’s reduction. Revenue growth has been firm as well. That being said, let’s see what the Industrial numbers look like.<\/p>\n Financials:<\/strong><\/em>\u00a0here is where\u00a0the\u00a0story gets interesting: Greg Harrison of Thomson Reuters noted this past weekend that if we\u00a0mutually exclude, JP Morgan’s q3 ’13 charge and Bank\u00a0of America’s expected q3 ’14 charge individually, we get different growth rates for the\u00a0Financial’s and the SP 500. My question to Greg was, “what\u00a0if exclude both charges and look at just the\u00a0operating earnings for JPM’s q3 ’13 and BAC’s q3 ’14, where does that leave the numbers for the Financial sector as\u00a0a whole and\u00a0how does that change the SP 500’s expected q3 ’14\u00a0earnings growth rate ?”<\/p>\n The answer is that if look at operating numbers for Financials (excluding both JPM and BAC’s charges), the sector is expected to grow 4.5% for q3 ’14 and the SP 500 is expected to grow +5.3%. (Long JPM and BAC)<\/p>\n Further complicating q3 ’14 estimates\u00a0(per Factset) Consumer Discretionary<\/strong> <\/em>is being impacted by the Pulte\u00a0EPS compare\u00a0($0.36 this quarter vs the\u00a0$5.42 in last year’s same quarter) so if the Pulte compare was excluded, Consumer Discretionary’s\u00a0year-over-year earnings growth would be +1.9%.<\/p>\n Typically when the quarter starts getting reported and analysts see results, numbers get lifted. My experience over the last two years is that the average quarterly increase in the earnings growth number from the start of the reporting period to the end, is usually 3% or more.<\/p>\n While Alcoa will set the tone in 3 hours, I still think q3 ’14 SP 500 earnings growth will come in at a pretty healthy rate, at least 8% – maybe as high as 10%.<\/p>\n Nothing has changed that much in the last 3 months, of a material nature.<\/p>\n Thanks for reading. Given consensus EPS and revenue estimates, we expect a good quarter from Alcoa (AA) tonight.<\/p>\n Trinity Asset\u00a0Management, Inc. by:<\/p>\n Brian Gilmartin, CFA<\/p>\n Portfolio manager<\/p>\n <\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" By the time most readers might get to reading this, the Fed’s September meeting minutes will be released (due in…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[17,38,3,89,84,27,9,98],"tags":[],"class_list":["post-4175","post","type-post","status-publish","format-standard","hentry","category-aa","category-bac","category-earnings","category-earnings-estimate-revisions","category-financial-sector","category-jpm","category-sp-500","category-sector-earnings-growth-estimates"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/4175","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4175"}],"version-history":[{"count":3,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/4175\/revisions"}],"predecessor-version":[{"id":4178,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/4175\/revisions\/4178"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4175"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4175"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4175"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}