Per Thomson Reuters “This Week in Earnings” the forward 4-quarter estimate for the SP 500 fell slightly this week to $123.61 versus last week’s $123.93.<\/p>\n
The p.e ratio on the forward estimate is now 17(x).<\/p>\n
The PEG ratio is now 23.5(x) given the impact of Energy on the forward estimate.<\/p>\n
The Earnings Yield on the SP 500 is 5.88%, down from 6% last week.<\/p>\n
The y\/y growth rate of the forward estimate turned positive once again to 0.72%, versus last week’s -2.29%.<\/p>\n
Analysis \/ Conclusion:<\/strong><\/em> Last week’s negative y\/y growth rate of the forward estimate was the first since 2009, so it is good to see this week’s growth rate turn back positive once again. There isn’t a whole lot to say or add to what has been said on this blog already in the last month about the impact of Energy on Q1 ’15 SP 500 earnings expectations and what the SP 500 will look like in terms of earnings growth in 6 weeks, or by mid-May ’15.<\/p>\n I fully expect the SP 500 to grow Q1 ’15 earnings, ex-Energy, (and given the dollar influence) to be at least +5% to +6% by the time Wal-Mart reports in mid-May. (The retail giant’s earnings report is widely thought to end each quarter’s earning’s season. Alcoa kicks off each earnings period, Wal-Mart is thought to finish the reporting season. Long both)<\/p>\n What fascinates me about the financial media is that virtually no outlet that I’ve heard told readers or viewers that Q4 ’14 SP 500 earnings growth, ex-Energy, was 9%<\/strong><\/em>, with Energy’s drag on the SP 500 earnings growth just 2%. (Yes, you read that right.) Jeff Miller the great blogger over at Dash of Insight who writes the “Weighing the Week Ahead” column every week, has always had it right when he has explained to viewers that the media is all about keeping viewers anxious and worried. I have yet to hear or read one media outlet say once “Gee, we were so worried about Q4 ’14 earnings, and yet they were very solid, and we were totally wrong, but we will keep up the same fear and anxiety over Q1 ’15 earnings, with the same intellectual rigor, since it keeps viewers riveted to the set, as our declining ratings indicate” (said no one ever…)<\/p>\n