{"id":6628,"date":"2017-01-22T18:03:38","date_gmt":"2017-01-22T18:03:38","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=6628"},"modified":"2017-01-22T18:03:38","modified_gmt":"2017-01-22T18:03:38","slug":"sp-500-weekly-earnings-update-forward-4-qtr-growth-rate-highest-since-late-2014","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=6628","title":{"rendered":"SP 500 Weekly Earnings Update: Forward 4-Qtr Growth Rate Highest Since Late 2014"},"content":{"rendered":"<p><em><strong>Thomson Reuters I\/B\/E\/S data by the numbers:\u00a0<\/strong><\/em><\/p>\n<ul>\n<li><em><strong>Forward 4-Quarter estimate:<\/strong><\/em> $132.93 vs last week&#8217;s $132.75<\/li>\n<li><em><strong>P.E ratio:<\/strong><\/em> 17(x)<\/li>\n<li><em><strong>PEG ratio:<\/strong><\/em> 2.5(x)<\/li>\n<li><em><strong>SP 500 earnings yield:<\/strong><\/em> 5.85%, vs last week&#8217;s 5.84%<\/li>\n<li><em><strong>Y<\/strong><strong>ear-over-year Growth Rate of Forward Estimate:<\/strong><\/em> +6.75%, the highest since 12\/5\/14&#8217;s 7.18%.<\/li>\n<\/ul>\n<p><em><strong>Comments\/Analysis\/Conclusion: <\/strong><\/em>There are two metrics this week that stick out: the year-over-year growth rate of the forward estimate is now the highest print at +6.75%, in the last 112 weeks or since 12\/5\/14. The 2nd is that the &#8220;SP 500 earnings yield&#8221; is now higher for three consecutive weeks, which is indicative of the flat SP 500 since mid-December, and a rising forward 4-quarter estimate.<\/p>\n<p>The drag that Energy has been on SP 500 earnings since late 2014, is now ending.<\/p>\n<p>SP 500 earnings are telling a very positive story. Has the forward estimate been wrong in the past ? Absolutely, but the trend of three straight years of $118 EPS for the SP 500 is now on the verge of ending.<\/p>\n<p>The $132 estimate for 2017 could be conservative if there is real tax reform and cash repatriation, BUT, we&#8217;ll see how much is operating earnings.<\/p>\n<p>The <a href=\"https:\/\/fundamentalis.com\/?p=6539\">2017 return estimate for the SP 500<\/a> depends mainly on tangible and material tax reform (in my opinion). The issues around the border tax, etc. and some of these confusing fiscal policy initiatives could be white-washed or at the very least diminished with meaningful tax reform.<\/p>\n<p>The problem is that US businesses are forced to &#8211; once again &#8211; delay and defer actions until they see what the new US President and Congress come up with in this New Year.<\/p>\n<p>Jeff Miller in his weekly &#8220;Weighing the Week Ahead&#8221; blog post, <a href=\"http:\/\/seekingalpha.com\/article\/4038482-weighing-week-ahead-will-policy-uncertainty-lead-stock-volatility\">asks the right question<\/a>.<\/p>\n<p>(This blog is about 2-3 articles behind updating readers on SP 500 sectors. Will hopefully get to these posts this week.)<\/p>\n<p>I do like this SP 500 action where it is treading water in the face of mostly decent earnings news.<\/p>\n<p>Nothing has changed about our &#8220;overweight US stocks, and underweight bonds&#8221; in the standard 60% \/ 40% asset allocation portfolio.<\/p>\n<p>Thanks for reading.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Thomson Reuters I\/B\/E\/S data by the numbers:\u00a0 Forward 4-Quarter estimate: $132.93 vs last week&#8217;s $132.75 P.E ratio: 17(x) PEG ratio:&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":[184,185,91],"tags":[],"class_list":["post-6628","post","type-post","status-publish","format-standard","hentry","category-184","category-2017-fiscal-policy","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\/6628","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=6628"}],"version-history":[{"count":5,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/6628\/revisions"}],"predecessor-version":[{"id":6633,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/6628\/revisions\/6633"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6628"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6628"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6628"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}