{"id":6494,"date":"2016-11-26T17:44:15","date_gmt":"2016-11-26T17:44:15","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=6494"},"modified":"2016-11-26T17:44:15","modified_gmt":"2016-11-26T17:44:15","slug":"sp-500-forward-growth-rate-rises-above-4-first-time-since-mid-january-15","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=6494","title":{"rendered":"SP 500 Forward Growth Rate Rises above 4%, First Time since Mid-January &#8217;15"},"content":{"rendered":"<p>The big data point that stuck out this week was the all-important year-over-year growth rate of the &#8220;forward 4-Quarter&#8221; estimate. We&#8217;ll walk through the numbers in a second, but the other aspect of the numbers that jumped out was that the bottom-up calendar year estimates for 2017 and 2018 were revised higher for the 2nd consecutive week.<\/p>\n<p>Geeky stuff and navel gazing indeed, but the data pattern and changes therein is what gets my attention.<\/p>\n<p><em><strong>Thomson Reuters data by the numbers:\u00a0<\/strong><\/em><\/p>\n<ul>\n<li><em><strong>Forward 4-quarter estimate:<\/strong><\/em> $128.56 vs last week&#8217;s $128.47<\/li>\n<li><em><strong>P.E ratio:<\/strong><\/em> 17.2(x)<\/li>\n<li><em><strong>PEG ratio:<\/strong><\/em> 4.2(x)<\/li>\n<li><em><strong>SP 500 earnings yield:<\/strong><\/em> 5.81% vs last week&#8217;s 5.89%<\/li>\n<li><em><strong>Year-over-year growth rate of the forward estimate:<\/strong><\/em> +4.03%, vs last week&#8217;s +3.80%, and the highest growth rate since mid-January &#8217;15 or 22 months ago<\/li>\n<\/ul>\n<p>Thomson Reuters notes that &#8220;ex-Energy&#8221; the SP 500 grew earnings in Q3 &#8217;16 +7.9%. Factset&#8217;s &#8220;Ex-Energy&#8221; growth is +6.5% for earnings and +4.5% for revenue.<\/p>\n<p>The third and 4th quarters of 2016 look to be decent, healthy quarters of earnings growth, even before the President-elect Trump and the 2017 Congressional agenda is being considered.<\/p>\n<p>The fact that the Street is finally taking up the &#8220;forward 4-quarter&#8221; EPS estimate for the SP 500 is likely anticipating what is to come in 2017, but even with today&#8217;s value of $128.56, it is still &#8220;light&#8221; considering the personal and corporate tax reform being discussed.<\/p>\n<p>My opinion is that Q4 &#8217;16 earnings and revenue growth just isn&#8217;t that important today, given what could come down the pike in 2017, both good and bad.<\/p>\n<p>We get the OPEC news this coming week, as well as the November &#8217;16 nonfarm payroll report, next Friday, December 2nd &#8217;16.<\/p>\n<p>The survey period for the payroll report is &#8211; from what i recall reading over the years &#8211; from the first to the 10th of every month, so the Presidential election this year, fell very close to the end of the reporting period.<\/p>\n<p>The Briefing.com expected &#8220;net new jobs&#8221; added to the economy in November &#8217;16 is 180,000, with the private sector expected to add 170,000.<\/p>\n<p>As has been written here for years, the two largest sector overweights presently for clients are Technology and Financial&#8217;s, with some exceptions amongst some accounts. Technology has stopped rallying in the last few weeks, while Financials have assumed the market leadership mantle.<\/p>\n<p>More to come tomorrow.<\/p>\n<p>Thanks for reading.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The big data point that stuck out this week was the all-important year-over-year growth rate of the &#8220;forward 4-Quarter&#8221; estimate.&hellip;<\/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":[92,1,91],"tags":[],"class_list":["post-6494","post","type-post","status-publish","format-standard","hentry","category-fwd-4-qtr-growth-rate-sp-500","category-uncategorized","category-weekly-earnings-update"],"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\/6494","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=6494"}],"version-history":[{"count":10,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/6494\/revisions"}],"predecessor-version":[{"id":6506,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/6494\/revisions\/6506"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6494"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6494"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6494"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}