S&P 500 in “Earnings Recession” While Stock Prices Soar

By the Curmudgeon

With 84% of S&P 500 companies reporting actual results, S&P 500 companies have collectively reported a 5.2% decline in earnings in the second quarter of 2023 (2Q-2023), according to FactSet.  That’s their worst performance since 3Q-2020 and the third consecutive quarter of declining S&P 500 earnings.  

FactSet says S&P 500 company revenues are on track to rise a meager 0.6% from a year ago.

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Here’s a chart of S&P 500 3Q-2023 earnings by industry group:

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For 3Q-2023, 49 S&P 500 companies have issued negative EPS guidance and 30 S&P 500 while 30 S&P 500 companies have issued positive EPS guidance.  For 3Q and 4Q-2023, analysts are projecting earnings growth of 0.1% and 7.6%, respectively according to FactSet.

Here’s a graph of S&P 500 change in forward 12-month EPS vs price change in the last 10 years:

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Be well, success, good luck and till next time………………………………………………………….

The Curmudgeon

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Curmudgeon is a retired investment professional.  He has been involved in financial markets since 1968 (yes, he cut his teeth on the 1968-1974 bear market), became an SEC Registered Investment Advisor in 1995, and received the Chartered Financial Analyst designation from AIMR (now CFA Institute) in 1996.  He managed hedged equity and alternative (non-correlated) investment accounts for clients from 1992-2005.

Victor Sperandeo is a historian, economist and financial innovator who has re-invented himself and the companies he's owned (since 1971) to profit in the ever changing and arcane world of markets, economies, and government policies.  Victor started his Wall Street career in 1966 and began trading for a living in 1968. As President and CEO of Alpha Financial Technologies LLC, Sperandeo oversees the firm's research and development platform, which is used to create innovative solutions for different futures markets, risk parameters and other factors.

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