Tag Archives: Earnings growth expectations

After a stellar 2018, earnings expectations for the S&P 500 have been ratcheted down for this year. Total returns will increasingly come from sources other than earnings.Earnings estimates in developed markets have been cut continuously over the past six months. The consensus expectation for earnings growth in 2019 for the S&P 500 is now around 3.5%. This compares with stellar earnings growth of 24.1% in the US in 2018, thanks in large part to the end-2017 US tax cuts announced by...

Recent hard macro data confirm the resiliency of the business cycle into year end and 2018.The momentum behind hard macro data is improving investors’ visibility on corporate profit growth in developed markets (DM), which we expect to be the main market risk factor driving equity markets over 2018.According to our analysis, 96% of year-to-date returns of the Stoxx Europe 600 have been due to earnings growth and 59% of the S&P 500’s (see chart). By way of comparison, only 37% of the MSCI...