Thomson Reuters data (by the numbers):
- Fwd 4-qtr est: $137.83 vs last week’s $138.05
- P.E ratio: 18x
- PEG ratio: 1.88x
- S&P 500 earnings yield: 5.51%
- Year-over-year growth of the fwd estimate: +9.63% vs last week’s +9.69%
Source: Thomson Reuter’s “This Week in Earnings” dated 9/15/17
Quick look at Q3 ’17 earnings estimates by sector:
- Energy: +134.8%
- Technology: +9.5%
- Industrial’s: +6.0 (guess someone forgot to tell GE)
- S&P 500: +6%
- Health Care: +3.7%
- Financials: +3.6% (trading losses in Q3 pulled numbers way down, Citi, Goldman talked about Q3 trading results this week)
- Real Estate: +3.4%
- Cons Spls: +2.7%
- Basic Mat: +0.6%
- Cons Disc: -0.1%
- Telco: -1.1%
- Utilities: -2%
The only sector to show upward revisions to expected growth rates for Q3 ’17 is Technology. Industrial’s estimates have held in well. Telco is slightly higher from the July 1 compare, but Telco is just less negative, and not positive.
I’m a believer that the S&P 500 discounts earnings 6-9 months forward, so the 3rd quarter is already “in” the market, but readers can see the numbers for themselves.
Apple (NASDAQ:AAPL) is still very much a big influence on the Tech sector and the S&P 500 given its 4% market cap weight in the S&P 500. As we wrote yesterday, the iPhone 8 release looks fine and the estimates revisions continue higher.
Our Financial’s post last Saturday, 9/9 was timely. The Financial sector had a good week this week, with the XLF +2.8% versus the S&P 500’s +1.6%. Client’s largest financial holding is Schwab (SCHW) and the stock was up 4% on the week.
Clients remain overweight Financial’s although that can change at any time, as well as the composition of the overweight. I continue to think the Financial sector offers more reward than risk, over the longer term.