Expected 2019 S&P 500 Earnings Growth Has Changed
Brian Gilmartin | Feb 10, 2019 12:06AM ET
Energy and Basic Materials, as well as Technology—led by Apple (NASDAQ:AAPL)—have been the biggest drag on expected, full-year, 2019 earnings growth for the S&P 500.
Energy is the biggest drag, falling from an expected 26% growth rate on October 1 ’18 to today’s 8.5% decline. (clients have not owned any Energy for years, ever since the bounce failed to materialize in the sector following the Q1 ’16 bottom. Energy’s market cap as a percentage of the S&P 500 has fallen from 14%-15% in mid-2014 to just 5%-6% today. The sector is becoming less important to the benchmark over time, and for good reason.)
Surprisingly, the Financial sector’s expected full-year earnings growth looks surprisingly stable for the calendar year. Clients remain overweight Financials as they did in ’18.
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