S&P steadies ahead of earnings
The S&P 500 held steady after a stronger week while analysts still see room for up to ~19% first‑quarter earnings growth, even as the index remains roughly 5% below January highs. Market commentary notes that this calm is conditional on companies defending margins and guidance during the upcoming earnings season. (ad-hoc-news.de) (ad-hoc-news.de)
The Standard & Poor’s 500 ended April 10 nearly flat at 6,816.89, as investors shifted from last week’s rally to first-quarter earnings reports due in the days ahead. (cnbc.com) The index slipped 0.11% on Friday but still gained about 3.6% for the week, its best weekly performance since November, while the Nasdaq Composite rose 0.35% and the Dow Jones Industrial Average fell 269.23 points. (cnbc.com) FactSet said on April 2 that analysts expected first-quarter earnings for the Standard & Poor’s 500 to rise 13.2% from a year earlier, up from a 12.8% growth estimate on December 31. FactSet also said estimated first-quarter revenue growth had increased to 9.7% from 8.2%. (factset.com) That estimate has room to move higher if companies beat forecasts at the usual rate. FactSet said on April 10 that if the average post-quarter earnings surprise matches the past 10 years, first-quarter profit growth would land near 19.0%. (factset.com) The setup going into reporting season is unusually constructive by recent standards. FactSet said 110 companies in the index had issued first-quarter earnings-per-share guidance, with 59 positive and 51 negative, the highest number of positive guides for a quarter since the second quarter of 2021. (factset.com) The gains are not spread evenly across the market. FactSet said most of the increase in first-quarter earnings expectations since December 31 had been concentrated in information technology and energy, with energy and information technology showing the two largest increases in expected dollar earnings. (factset.com) Valuations have also changed as prices pulled back from the start of the year. FactSet said in its January 23 update that the Standard & Poor’s 500 traded at 22.1 times forward 12-month earnings then, while an Investopedia report citing Goldman Sachs Research said that multiple had fallen to about 19 by early April. (factset.com) (investopedia.com) That leaves this earnings season carrying more weight than a normal quarter. With the index off its January peak and profit expectations still high, investors now need companies to hold margins, confirm demand, and avoid cutting guidance when reports begin in earnest this week. (factset.com 1) (factset.com 2)
