S&P 500 Earnings Estimates Keep Falling This Quarter
- According to FactSet, fourth quarter earnings estimates continue trending lower.
- Wall Street analysts as a whole are now expecting S&P 500 earnings per share to fall 4.4 percent year over year in the fourth quarter.
- Wall Street analysts entered the fourth quarter with expectations for only a 0.7 percent decline in earnings per share.
US major indices are heading deeper into December mixed. The SPDR S&P 500 ETF Trust (NYSE: SPY) is now lower by nearly 2 percent since the start of 2015 but the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ: QQQ) is higher by more than 7 percent.
Investors and traders have legitimate reasons to be concerned as some of the major indices are in the red for 2015. However, switching the calendar to 2016 doesn't imply 2015 is in the history books as companies still need to report their quarterly results –- and Wall Street is turning more negative on the earnings prospects.
According to FactSet, Wall Street analysts are now expecting S&P 500 earnings per share to decline 4.4 percent year over in the fourth quarter. This compares to a sentiment of a 0.7 percent decline which was expected at the beginning of the quarter.
FactSet added that estimated earnings for the fourth quarter fell 3.6 percent since the end of September. Meanwhile, the value of the S&P 500 index rose by 8.4 percent from the end of September through the end of November, marking the 14th time out of the past 20 quarters in which earnings per share expectations fell while the index gained in value during the first two months of the quarter.
Energy Top Of Worry List
The Energy sector will likely be top concern for investors given the sector's 20.25 percent decline over the past one-year. The second worst performing industry, Utilities, lost more than 9 percent, followed by Materials' 8.51 percent decline.
The best performing sector over the past year has been the Consumer Discretionary segment which gained 11.74 percent. The second best performing sector, Information Technology, gained only 5.1 percent, followed by Consumer Staples' 2.3 percent gain.
Finally, the Health Care sector is relatively unchanged over the past year and is higher by just 0.78 percent.
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