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Mar 08 2019

So Long Tax Cuts… We Hardly Knew Ye

  • Mar 8, 2019

Our earnings waterfall analysis for the fourth quarter tells a story consistent with the entirety of 2018: earnings growth was fantastic, boosted by the twin drivers of strong sales growth and a lower corporate tax rate. Chart 1 spotlights the quarter’s tally, which produced a healthy sales growth number despite some economic weakening.

Feb 15 2019

2019 Earnings: Don't Bet On 6%

  • Feb 15, 2019

Currently, the collective intelligence of Wall Street is predicting 6% S&P 500 EPS growth in 2019. It’s also the 61-year average annual growth rate for the index, so how wrong could it be?

Dec 07 2018

Earnings Releases Cause Surge In Price Volatility

  • Dec 7, 2018

Three years ago, we did a series of studies looking at price reactions to corporate earnings releases (ER) and we found that, since 2007, price movement has become more dramatic on ER days.

Sep 21 2018

Second Quarter Earnings Waterfall

  • Sep 21, 2018

The S&P 500 reported blockbuster earnings growth again in the second quarter of 2018. With the corporate tax cut boosting profits this year, we were curious to know how much of the improvement was tax driven and how much was due to the exceptionally strong economy.

Jun 07 2018

Cycles And Taxes And GICS, Oh My!

  • Jun 7, 2018

Analyzing quarterly financial results and developing insights about upcoming periods is always difficult, but the first quarter of 2018 was unusually complicated.

May 05 2018

Earnings Soar While Liquidity Circles The Drain

  • May 5, 2018

Question: How can you be cautious on the stock market with recent earnings results so spectacular?

Dec 07 2017

The “Gap” Is Gone. Now What?

  • Dec 7, 2017

In Q3, the CBO’s Nominal Output Gap swung to positive for the first time since the last business cycle peak. This type of move has historically meant the cyclical peak in profit margins is close at hand.

Jun 07 2017

Emerging Markets: Fundamental Diffusion Indicators

  • Jun 7, 2017

Within EM, more robust growth is being exhibited by: 1) firms in Emerging Europe; 2) companies in Energy, Materials, and Financials; and, 3) larger cap companies.

Jun 07 2017

Earnings Momentum

  • Jun 7, 2017

The two-month Up/Down Ratio for Q1 results shows a reading of 1.48. Like the quarter before, an excellent “one-month” figure has been dragged down by a second month’s results.

May 05 2017

How To (Almost) Double Your Money In Under Ten Years

  • May 5, 2017

Buying the S&P 500 on one of the worst possible days in history ultimately yielded a total return of +87.4% (+6.8% annualized) through the end of April 2017...darn, sounds like an advert for Vanguard!

Feb 09 2017

Signs Of Improving Earnings & Sales

  • Feb 9, 2017

Growth Is Re-emerging: A recurring theme in recent Leuthold Group research is the apparent turn in corporate profits and a general improvement in business results. To monitor corporate sales/earnings trends, we measure the number of companies reporting higher quarterly sales and earnings than a year ago, versus companies reporting lower sales and earnings.

Jan 18 2017

An Earnings Bottom...What's Next?

  • Jan 18, 2017

It seems like it’s been ages since investors have been able to get excited about earnings growth, although our October 21st “Chart of the Week” showed that the S&P 500’s current earnings slump has been unremarkable in both depth and duration.


Jan 07 2017

Impact Of Lower Corporate Tax Rate

  • Jan 7, 2017

A stock market wild card in 2017 is the potential for a significant reduction in the corporate tax rate. President-elect Trump’s desire to lower corporate taxes, if implemented, would have multifaceted impacts on businesses.

Dec 07 2016

Calendar Effect On Earnings-Release Day Price Movement

  • Dec 7, 2016

Earnings season is not only important for fundamental investors, it can be equally so for quant managers. For quants that incorporate fundamental data, like us, historical trends and changes in consensus estimates may weigh heavily on model output.

Nov 05 2016

Earnings-Release Price Movement Among Sectors/Industries

  • Nov 5, 2016

Earnings season is not only important for fundamental investors, it can be equally so for quant managers. For quants that incorporate fundamental data, like us, historical trends and changes in consensus estimates may weigh heavily on model output.

Nov 05 2016

Four Thousand Companies Can’t Be Wrong!

  • Nov 5, 2016

Scott Opsal’s “Chart of the Week” in mid-October suggested the seven-quarter S&P 500 earnings recession may have run its course.

Oct 20 2016

EPS Touching Bottom?

  • Oct 20, 2016

Early in the third quarter earnings season, S&P 500 companies are providing a glimmer of hope that the long earnings recession may be ending. 

Jun 17 2016

Inflation Remains Largely In Line With Expectations

  • Jun 17, 2016

The latest jobs report disappointed but we think it’s a short term aberration as other data still point to a healthy job market. Some of the key market-based inflation drivers, however, have reversed course a bit in the last couple weeks. Patience is still the right strategy.


Jun 07 2016

Taking Earnings At Face Value

  • Jun 7, 2016

We’ve said before that one of Wall Street’s great inventions is the “forward operating earnings” estimate for the S&P 500, because it results in a P/E ratio that invariably sounds reasonable (if not outright cheap). But this already-misleading EPS metric has become even more so in recent years because of the proliferation of non-GAAP “adjusted EPS” reporting practices.

May 18 2016

Inflation Exceeded Expectations In April

  • May 18, 2016

Inflation exceeded expectations in April. The more durable inflation measures such as wage inflation are also improving. We characterize the recent improvement in inflation as a relief from the threat of deflation but still quite far from being a catalyst for run-away inflation.


Apr 15 2016

Inflation-Patience Recommended

  • Apr 15, 2016

Inflation missed expectations in March.  The three key inflation drivers this year - oil, the Dollar and the Chinese yuan, are all going in the right direction.  The risk of being too early on the inflation call far outweighs the risk of being too late.  Patience is still recommended.


Apr 07 2016

Earnings Momentum

  • Apr 7, 2016

The final month of 2015 earnings reports registered an Up/Down Ratio of 1.07. Once again, we have to go back to the dark days of 2009 to find a lower “three-month” ratio.

Mar 23 2016

Inflation Modestly Exceeds Expectations

  • Mar 23, 2016

Inflation met or modestly exceeded expectations. The three key drivers for inflation (oil, the Dollar and the Chinese yuan) continued to improve. But we are not rushing to declare victory on disinflation. “Organic” inflation, such as sustained wage inflation, has been very elusive so far.


Mar 07 2016

Momentum Trouble

  • Mar 7, 2016

Momentum reversed in February, primarily due to rallying Materials stocks. Value and Profitability both performed well.

Mar 07 2016

Earnings Momentum

  • Mar 7, 2016

The second month of Q4 2015 earnings reports registered an Up/Down Ratio of 1.12—up from the post- financial crisis low of 1.11 last quarter. With 51% of the observations in February, the “Up” count edged out the “Down,” but barely.

Jan 08 2016

Knee Deep In An Earnings Recession

  • Jan 8, 2016

It’s a scary thought but what does 2015 have in common with the infamous years of 2001, 2008, and 2009? An earnings recession for the S&P 500 — and the 2015 vintage certainly has some unique traits.

Dec 08 2015

Earnings Momentum

  • Dec 8, 2015

The second month of Q3 2015 earnings reports registered an Up/Down Ratio of 1.11. On its own, the month of November was particularly weak with a stand-alone Up/Down Ratio of 0.97.

Nov 06 2015

Earnings Momentum

  • Nov 6, 2015

Up/Down Earnings: Worst Start In Six Years

Oct 07 2015

Earnings Momentum

  • Oct 7, 2015

The third and final month of Q2 earnings reports registered an Up/Down Ratio of 1.18. This is the second lowest “three month” reading of the past 23 quarters.

Oct 07 2015

Earnings: What Is Normal?

  • Oct 7, 2015

Corporate profits are notoriously cyclical, and for decades we’ve sought to temper their swings by using a five-year smoothing of S&P 500 EPS in our valuation work.

Oct 07 2015

Chinese Economic Concerns Are Overdone

  • Oct 7, 2015

The traditional economic indicators are no longer as relevant as people think, and China’s condition may not be as bad as most fear.

Sep 09 2015

Earnings Momentum

  • Sep 9, 2015

The second month of Q2 earnings reports registered an Up/Down Ratio of 1.17. This “two-month” figure is the third lowest since mid 2009.

Aug 07 2015

Earnings Momentum

  • Aug 7, 2015

Up/Down Earnings: Dismal Start To Q2

Jul 08 2015

A Kind Word For “Forward Earnings”

  • Jul 8, 2015

Our criticism of the widespread trust in “forward earnings” has sometimes been harsh, but consider the following: the latest 12-month forward EPS estimate for the EAFE index is $122.71, virtually matching the forward estimate that was made in January 2006.

Jul 08 2015

Earnings Momentum

  • Jul 8, 2015

Up/Down Earnings: Q1 Finishes Substantially Below Average

Jun 04 2015

Earnings Momentum

  • Jun 4, 2015

The second month of Q1 earnings reports registered an Up/Down Ratio of 1.27. Following the theme from last month, this “two-month” score is well below average.

May 07 2015

Earnings Momentum

  • May 7, 2015

The first month of Q1 earnings for 2015 registered an Up/Down Ratio of 1.63. After three consecutive above average quarters, the ratio did a swan-dive deep into below average territory.

Apr 08 2015

Earnings: Less Than Meets The Eye

  • Apr 8, 2015

Amid all the praise heaped on the corporate sector for posting record earnings in the midst of a sluggish global expansion, allow us a respectful vote of dissent. Earnings are abysmal—especially among the S&P 500 companies presumed to be the torch-carriers for this cycle’s profitability rebound.

Apr 07 2015

Earnings Momentum

  • Apr 7, 2015

The final month of Q4 earnings reports registered an Up/Down Ratio of 1.48. If you recall, we entered the final month of earnings with a well above average, two-month ratio of 1.67. On a stand alone basis, March had a very weak ratio of 1.06.

Mar 06 2015

Earnings Momentum

  • Mar 6, 2015

Up/Down Earnings: Ratio Still Above Average