Estimated Earnings Growth for the S&P 500

Below we highlight historical earnings growth estimates for the S&P 500 for Q4 2008 and full-year 2009.  As shown, EPS estimates have dropped sharply over the last few months, and analysts are currently expecting the S&P 500 to see year-over-year earnings fall by 12% in the fourth quarter.  At the start of September, analysts were actually expecting growth of 40%, which was largely because financial companies were expected to bounce back from a very poor Q4 in 2007.  Instead, these companies are struggling much more than they were at this time last year.

Estimates for 2009 have been dropping significantly as well.  Back in September, analysts were expecting 2009 earnings growth of 24.7% versus 2008.  But estimates are now at just 4.5%, and judging by the current trend, analysts will be looking for negative 2009 growth in no time.

 

 

Comments

[jammer]

Watch out below. S&P 5oo earnings below %50 is coming (or less).

[Doug]

NO YOU CAN'T FIGHT THE FED!!!!
The old saying "You can't fight the Fed" has never been more true than it is today. It may have just taken on a little different meaning. You can't fight the Fed in this environment because their relentless printing of money will cause the value of the dollar to decline. Maybe it really had to be done to save the banking system (but right or wrong printing money will have the same effect--it will decrease the value of the dollar). I hate to continually make the weak dollar argument as it almost seems unpatriotic, but you cannot deny the effects of the Fed's recent actions. I have gotten many responses arguing that the dollar is still the world's reserve currency and will remain so as we pull out of this crisis. But is this time different? I would argue that it is. Let me say one more time that China is still growing (growth is declining, but growth is still growth). Is China poised to gain some of the market share of the "reserve currency"? They are positioning themselves to do just that. Read the remainder of the article at www.stockshotz.blogspot.com

[Anon Y Mouse]

Um, the fed has been losing badly. Don't fight the fed until it runs out of gas and then fight it with impunity. Nothing the Japanese fed did could save it from a deflationary crash, and nothing the US fed will do can save us from a deflationary crash either. You know why? Because the fed can't just give everyone money. The fed needs people to borrow more and more and more and people don't want to do it anymore. The credit bubble is bust for sure and for certain this time and you will find that there is no reflating it.

Sounds crazy I know, but lots of people are going to learn what a deflationary crash is first hand and what its effects are on politics and society. Hint: it will not be pretty.