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Q3 Earnings at the Halfway Point

| October 28, 2015
Market Updates

As of this moment, we now have earnings results from 251 of the S&P 500 companies, with another twenty set to report after today’s market close.  Total earnings for the companies that have reported thus far are up 2.6% on 1.4% lower revenues, which is a weaker performance than we have seen from the same group of companies in recent quarters.

Looking at the overall picture, and extrapolating expected results for the remaining 249 companies still to report, the projection is for total earnings to decline 2.7% from Q3 of last year on 3.9% lower revenues.

Also, as we mentioned earlier in the week, estimates for the fourth quarter are declining at an accelerating pace.  Total Q4 earnings for the S&P 500 are now expected to be down 6.6% from the same period last year, down from an expected decline of 4.7% just two weeks ago.  This rate of negative revisions is higher than we have seen in the past two quarters.

While today’s Fed announcement hinting at a December rate hike and tomorrow’s first read on Q3 GDP will dominate the headlines, we will continue to focus on the earnings picture as well in determining the future direction of equity prices.