{"id":8977,"date":"2019-05-10T20:55:05","date_gmt":"2019-05-10T20:55:05","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=8977"},"modified":"2019-05-10T20:55:05","modified_gmt":"2019-05-10T20:55:05","slug":"despite-tariff-fears-19-and-20-sp-500-eps-estimates-see-first-signs-of-improvement","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=8977","title":{"rendered":"Despite Tariff Fears, ’19 and ’20 SP 500 EPS Estimates See First Signs of Improvement"},"content":{"rendered":"
\"\"<\/a>
Click to enhance \/ enlarge<\/figcaption><\/figure>\n

 <\/p>\n

May seem like a small data point but this week showed the first sequential improvement in the “4-week” rate of change in the SP 500 2019 and 2020 EPS estimate since – guess when – September 21 ’18.<\/p>\n

At least for the 2019 EPS estimate.<\/p>\n

The spreadsheet shows the actual data in the highlighted blocks.<\/p>\n

Geeky stuff – but its part of what this blog is all about every weekend.<\/p>\n

SP 500 earnings data – by the numbers:\u00a0<\/strong><\/em><\/p>\n

    \n
  • Fwd 4-qtr est:<\/strong><\/em> $171.87 vs $172.03 last week<\/li>\n
  • PE ratio:<\/strong><\/em> 16.8x<\/li>\n
  • PEG ratio:<\/strong><\/em> 3.3x<\/li>\n
  • SP 500 earnings yield:<\/strong><\/em> 5.96% vs last week’s 5.84%<\/li>\n
  • Year-over-year growth of fwd est:<\/strong><\/em> 5% vs 5.2% last week<\/li>\n<\/ul>\n

    Summary \/ conclusion: <\/strong><\/em>After the Q4 ’18 correction, the data was reviewed and I noticed the “4-week” rate of change turned lower around the 3rd week of September ’18. For 2019, the “4-week” rate of change has sequentially improved for the first time since that September ’18 date, so let’s see if the 4-week rate of change is an effective forecasting tool, at least in terms of earnings recessions. The SP 500 “earnings yield” remains near 6% as it has the last 4 – 6 weeks, and that’s usually a good sign. Relative to earnings and expected growth, the market is not terribly or even unreasonably valued, and this is after a week of “tariff fear”.<\/p>\n

    One final metric: Q1 ’19 SP 500 expected revenue growth of +5.6% is actually stronger than than Q4 ’18’s +5.1%. Health Care is unusually strong for Q1 and Q2 ’19 and I’ve asked IBES by Refinitiv for some clarification. Health Care revenue is expected to grow 14% in Q1 ’19, well above it’s longer-term average.<\/p>\n

     <\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

      May seem like a small data point but this week showed the first sequential improvement in the “4-week” rate…<\/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":[190,162,210],"tags":[],"class_list":["post-8977","post","type-post","status-publish","format-standard","hentry","category-10-year-treasury-yield","category-sp-500-earnings-yield","category-sp-500-estimate-revision-data"],"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\/8977","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=8977"}],"version-history":[{"count":3,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/8977\/revisions"}],"predecessor-version":[{"id":8981,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/8977\/revisions\/8981"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8977"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8977"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8977"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}