Market Wrap
Narratives
Week Ahead
FactSet Earnings
Overall, 25% of the companies in the S&P 500 have reported actual results for Q1 2021 to date. Of these companies, 84% have reported actual EPS above estimates, which is above the five-year average of 74%. If 84% is the final percentage for the quarter, it will tie the mark (with Q2 2020 and Q3 2020) for the highest percentage of S&P 500 companies reporting a positive EPS surprise since FactSet began tracking this metric in 2008. In aggregate, companies are reporting earnings that are 23.6% above the estimates, which is also above the five-year average of 6.9%. If 23.6% is the final percentage for the quarter, it will mark the largest earnings surprise percentage reported by the index since FactSet began tracking this metric in 2008.
Due to the number and magnitude of these positive EPS surprises, the index is reporting higher earnings for the first quarter today relative to the end of last week and relative to the end of the first quarter. The blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) earnings growth rate for the first quarter is 33.8% today, compared to an earnings growth rate of 30.3% last week and an earnings growth rate of 23.8% at the end of the first quarter (March 31). Positive earnings surprises reported by companies in multiple sectors (led by the Financials, Health Care, Information Technology, and Communication Services sectors) were responsible for the improvement in overall earnings for the index during the past week. Positive earnings surprises reported by companies in the Financials sector have also been the top contributors to the overall increase in earnings for the index since the end of the first quarter.
If 33.8% is the actual growth rate for the quarter, it will mark the highest year-over-year earnings growth reported by the index since Q3 2010 (34.0%). The unusually high growth rate is due to a combination of higher earnings in Q1 2021 and an easier comparison to weaker earnings in Q1 2020 due to the negative impact of COVID-19 on numerous industries. Nine sectors are reporting year-over-year earnings growth, led by the Financials, Consumer Discretionary, and Materials sectors. Two sectors are reporting a year-over-year decline in earnings, led by the Industrials sector.
In terms of revenues, 77% of S&P 500 companies have reported actual revenues above estimates, which is above the five-year average of 64%. If 77% is the final percentage for the quarter, it will tie the mark (with Q1 2018) for the third-highest percentage of S&P 500 companies reporting a positive revenue surprise since FactSet began tracking this metric in 2008. In aggregate, companies are reporting revenues that are 2.9% above the estimates, which is above the five-year average of 1.0%. If 2.9% is the final percentage for the quarter, it will mark a tie (with Q4 2020) for the largest revenue surprise percentage reported by the index since FactSet began tracking this metric in 2008.
Due to the number and magnitude of these revenue surprises, the blended revenue growth rate for the first quarter is higher now relative to the end of last week and relative to the end of the first quarter. As of today, the S&P 500 is reporting year-over-year growth in revenues of 7.5%, compared to year-over-year growth in revenues of 7.1% last week and year-over-year growth in revenues of 6.2% at the end of the first quarter (March 31). Positive revenue surprises reported by companies in the multiple sectors (led by the Energy, Communication Services, and Information Technology sectors) were responsible for the increase in overall revenues for the index over the past week. Positive revenue surprises reported by companies in the Financials and Energy sectors have been the largest contributors to the increase in the overall revenues for the index since the end of the first quarter.
If 7.5% is the actual growth rate for the quarter, it will mark the highest year-over-year revenue growth reported by the index since Q3 2018 (8.6%). Eight sectors are reporting year-over-year growth in revenues, led by the Information Technology, Consumer Discretionary, and Communication Services sectors. Three sectors are reporting a year-over-year decline in revenues, led by the Industrials sector.
Metric | UpDn | This Week | Prior Week | Comments |
---|---|---|---|---|
Forward 12-mo Estimate | 🔵 | 185.01 | 184.05 | vs. @December 31, 2020 $159.02 |
Forward 12-mo PE | 🔴 | 22.6 | 22.7 | vs. @December 31, 2020 26x |
Earnings Yield | 🔵 | 4.44 | 4.4 | vs. @December 31, 2020 4.23% |
2y Combined Average Growth Rate % | 🔵 | 7 | 6 | vs. @December 31, 2020 3% |
S&P 500 Futures
Bull vs Bear
This Week
Last Week