Corporate America Keeps Adding To Earnings Upside
- With about 25% of S&P 500 Index companies having reported, first quarter earnings are tracking to a 34% year-over-year increase, an impressive 10 percentage points above March 31 estimates.
- S&P 500 revenue is on track to grow 7.4% year over year, more than one percentage point above March 31 estimates, led by technology’s expected 16% increase.
- Earnings estimates for the index over the next four quarters have risen by an impressive 1.4% to over $185 per share since earnings season began.
- This week is the busiest of the season with over 180 S&P 500 companies slated to report.
U.S. stocks begin a big week of corporate earnings little changed following Friday's growth surge
- European markets are mixed with the German DAX
- Asian markets were mostly lower with Japan outperforming on strength from semiconductors.
Is all the good news priced in?
In last week’s Weekly Market Commentary we discussed whether stock prices might be reflecting peak optimism. This week we tackle that same topic of peak optimism, but by looking at some valuation metrics. While valuations are elevated with a lot of good news is priced in, they still appear reasonable when factoring in interest rates and inflation. See today’s Weekly Market Commentary for details, available at 1p.m. ET.
Week ahead. This week the following economic data is slated to be released:
- Monday: Durable orders (Mar.)
- Tuesday: S&P/Case-Shiller Composite and Federal Housing Finance Agency (FHFA) home price index (), consumer confidence (Apr.)
- Wednesday: Wholesale inventories (Mar.), Federal Reserve policy meeting
- Thursday: Weekly initial continuing claim, Q1 GDP, pending home sales (Mar.)
- Friday: Personal income and consumption expenditures (Mar.), University of Michigan sentiment (Apr.)
The S&P 500 broke a 4 week streak of +1% gains last week, but a Friday rally pushed it to only a marginal loss for the week and back within a hair of all-time highs. Markets are mostly quiet this morning, but copper is breaking out of a two-month consolidation to its highest price in 10 years, a positive macro signal.
The United States reported 34,000 new COVID-19 cases on Sunday, down 19% from Sunday and marking the eleventh straight week over week decline (source: New York Times).
- Northern states that previously had seen a surge in cases are now seeing a decline. Oregon now the only state reporting a rapid rise in cases over the past week.
- The pace of vaccinations has dipped under 3 million per day, but over half of the adult population in the U.S. has received at least one dose of the vaccine.
Some Pros and Cons
On the LPL Market Signals podcast, Chief Market Strategist Ryan Detrick discusses some potential worries, why any weakness could be a buy the dip opportunity, and Sustainable Investing this Earth Day.
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