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Bob Carey
Chief Market Strategist
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  Corporate Earnings Estimates Reflect Strength
Posted Under: Broader Stock Market
Supporting Image for Blog Post

Supporting Image for Blog Post

View from the Observation Deck  

  1. Today's chart is intended to give investors some visual perspective on where equity analysts think earnings are headed. 
  2. Click here to compare these estimates to the projections from 1/9/18. You will find that they have been adjusted higher across the board. 
  3. With respect to the S&P 500 Index, as of 6/30/18, earnings were projected to rise from $29.51 in Q1'17 to an estimated $42.46 in Q4'18, or a potential increase of 43.88%.
  4. The S&P MidCap 400 Index earnings were projected to rise from $17.20 in Q1'17 to an estimated $28.98 in Q4'18, or a potential increase of 68.49%.
  5. The S&P SmallCap 600 Index earnings were projected to rise from $7.45 in Q1'17 to an estimated $14.50 in Q4'18, or a potential increase of 94.63%.
  6. At the midpoint of 2018, the S&P 500, S&P MidCap 400 and S&P SmallCap 600 Indices stood 5.38%, 2.61% and 3.33%, respectively, below their all-time highs, according to data from Bloomberg. 
  7. We believe that corporate earnings drive the direction of stock prices over time, especially when the major indices are trading at or near record highs.

This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions and other expenses incurred when investing. There can be no assurance that any of the projections cited will occur. Investors cannot invest directly in an index. The S&P 500 Index is a capitalization-weighted index comprised of 500 stocks used to measure large-cap U.S. stock market performance. The S&P MidCap 400 Index is a capitalization-weighted index that tracks the mid-range sector of the U.S. stock market. The S&P Small Cap 600 Index is a capitalization-weighted index that tracks U.S. stocks with a small market capitalization.

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Posted on Thursday, July 5, 2018 @ 1:10 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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